Preamble

The House met at half-past Eleven o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

KENT COUNTY COUNCIL BILL [LORDS] (BY ORDER)

MEDWAY COUNCIL BILL [LORDS] (BY ORDER)

MERSEY TUNNELS BILL (BY ORDER)

Orders for Second Reading read.

To be read a Second time on Thursday 9 March.

Oral Answers to Questions — TRADE AND INDUSTRY

The Secretary of State was asked—

Trade Links (Bulgaria)

Mr. Kevin Barron: What his assessment is of the prospects for improved trade links with Bulgaria. [111531]

The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): A number of developments suggest that there are likely to be good prospects for improving trade links with Bulgaria. The European Union formally opened accession negotiations with Bulgaria on 15 February. That move was strongly supported by Britain. British Trade International, in co-operation with other organisations, is involved in a number of initiatives, such as the London chamber of commerce business mission in May, which will promote commercial opportunities in the market to the UK business community.

Mr. Barron: I thank my right hon. Friend for that answer. There are increasing opportunities in Bulgaria, particularly since the currency stabilisation. She will know that Bulgaria is currently off cover with the Export Credits Guarantee Department. If British businesses want to export to Bulgaria, will the Government consider cases individually until the advisory council says that Bulgaria should be on cover and we have a stronger trading relationship?

Mrs. Liddell: My hon. Friend has an extensive knowledge of Bulgaria and he is right to say that it has not had long-term ECGD cover since April 1990, when it declared a unilateral moratorium on debt repayment and

servicing. However, the provision of ECGD cover for Bulgaria is under review. A decision should be reached within the next month.

Mr. Tam Dalyell: What undertakings did we give Bulgaria during the war against Serbia and are we implementing them?

Mrs. Liddell: As my hon. Friend knows, that is a matter for my right hon. Friends the Foreign Secretary and the Secretary of State for Defence. When my right hon. Friend the Prime Minister visited Sofia in May last year, he said that in view of the progress that Bulgaria had made towards democracy and attempts to secure a properly operating free market, the EU should consider it as part of the next wave for accession.

East Midlands

Liz Blackman: What measures his Department is taking to promote enterprise in the east midlands region. [111532]

The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): We are supporting the East Midlands development agency; we are creating a new regional venture capital fund; and my right hon. Friend the Minister for Trade will today announce a planning charter for the east midlands that will make the region's planning system the most efficient in the country.

Liz Blackman: I thank my hon. Friend for that answer. Erewash Partnership is a successful enterprise agency in my constituency that supports local businesses well and receives discretionary funding from the local training and enterprise council. Will my hon. Friend do all that she can to ensure that such organisations continue to be resourced during the transition leading to the setting up of the Small Business Service?

Ms Hewitt: I know that my hon. Friend is active on the board of the Erewash Partnership, which is doing excellent work. I understand her concern and I assure her that my officials are working with other Departments to see how we can sustain essential activities after April 2001. In the meantime, the Department for Education and Employment is making up to £41 million available nationally to support discretionary activity that might otherwise be in jeopardy.

Mr. Andrew Robathan: What difference exactly has the East Midlands development agency made to employment, inward investment and other enterprise in the east midlands? Most of us find it just another of the bureaucratic measures that have been heaped on the country by the Government. The hon. Lady talks about her colleagues at the Department of the Environment, Transport and the Regions and planning-friendly guidance, which we all support up to a point. Will she ensure that no further enormous swathes of countryside in the east midlands are concreted over and that the planning-friendly guidance will lead to buildings on brownfield sites in cities, not in my constituency which does not need any more building?

Ms Hewitt: The business people in the east midlands whom I talk to regularly are working closely with the


EMDA and welcome its support for greater activities to promote exports from and inward investment to the region. The success of the agency is illustrated by the fact that it has taken a lead in creating the new planning charter, which will allow councils to give advance information about planning applications with job-creating potential so that developers and proposed inward investors can create and implement plans much more quickly.

Mr. Andrew Reed: The business people in my constituency support the establishment of the EMDA. There are already many examples of the impact that it has made in its first few months of operation, particularly a £3.5 million investment in one site. Although the EMDA strategy is of great benefit to the majority of sectors in Leicestershire, one sector worries me, as I am sure that it worries my hon. Friend the Minister—the textiles sector. What measures can she offer, including working with the EMDA, to ensure that the textile sector has a prosperous future?

Ms Hewitt: I entirely share my hon. Friend's concern about the textiles industry. I recently met Paul Gates of KFAT—the National Union of Knitwear, Footwear and Apparel Trades—for discussions and I am working closely with the new textiles and clothing strategy group which our Government established. Its draft paper on a strategy to make the industry more competitive is out for consultation. I welcome the East Midlands textiles and clothing partnership, which has brought employers and others in our region together to promote and improve training, marketing and export promotion.

Mrs. Angela Browning: We continue to receive letters from manufacturing and horticultural companies in the east midlands. What assessment has the Minister made of the impact of the climate change tax in that region? There is great concern, particularly in the clothing industry, among firms that have already invested capital to improve the efficiency of their factory systems. The Government were forced to modify the original formula for the tax. Has the Minister made an assessment of how east midlands sectors such as clothing will be affected by what is still seen to be punitive tax on their profits and viability?

Ms Hewitt: We have been working closely with all sectors of industry throughout the country to develop a climate change levy that will be good for the environment and will not damage but will improve the competitiveness of industry. My right hon. Friend the Chancellor of the Exchequer will be making further announcements on the levy in due course.

Information and Communication Technologies

Mr. James Plaskitt: What action he is taking to ensure that the UK's manufacturing sector improves its performance relative to overseas competitors in the area of information and communication technologies. [111533]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): The Government's policies on new ICT are based on ensuring business success in the new knowledge-based economy. That applies to manufacturing as to other sectors of industry.

Mr. Plaskitt: Many of the thriving small and medium enterprises in my constituency are manufacturing companies and owe their success to operating at the leading edge to information technology. What steps can my right hon. Friend take to encourage the spread of that technology into traditional manufacturing sectors?

Mr. Byers: My hon. Friend makes an important point. There is clearly a deficit in some traditional manufacturing sectors in embracing new technologies. Just before Christmas, my Department published a document that showed by example how traditional manufacturing sectors could benefit from new technologies. By best practice, benchmarking and demonstrating how manufacturing can benefit from new technologies, we will make the case and ensure that more manufacturing sectors embrace them.

Mr. Peter Brooke: What arrangements are the Government making to measure the loss of mobile IT skills through IR35—especially as their loss will immediately accrue to the advantage of the overseas competitors mentioned in the original question?

Mr. Byers: There are no indications that skilled people are leaving the United Kingdom as a result of the introduction of IR35, which was introduced to clamp down on tax evasion. I am confident that it will be successful in achieving that and that it will not have the detrimental effects to which the right hon. Gentleman referred.

Gillian Merron: How will my right hon. Friend encourage schools, universities and colleges to work with industry, so that companies such as ABB Alstom in Lincoln can meet their needs in terms of the people and skills they desperately need to improve their performance in the manufacturing sector?

Mr. Byers: There is no doubt that we need to break down the divide that all too often exists between a child's experience in school and the world of work. Many companies have exciting and attractive programmes that demonstrate what the world of work is actually like. The more we encourage such links, that will benefit not only individual children but companies and the UK economy.

Dr. Vincent Cable: I welcome the Government's recent announcement of increased competition in the telecommunications sector. It will clearly benefit both manufacturing and residential users. I have two specific follow-up questions. The Government have announced their intention of accelerating the phasing out of the British Telecom monopoly on local loop. When will that happen? Secondly, since announcements were made by the Chancellor of the Exchequer, could the Secretary of State set out the respective roles of the Chancellor and himself in determining policy in this area, as it is causing considerable confusion in the industry?

Mr. Byers: The Government have a view, shared by the Chancellor and myself, about the importance of


opening up access to the internet. By July 2001, we will have established competition. The regulator at Oftel will be responsible for the discussions that take place. It is a policy that the Government agree with, and it is important that it is delivered because it will be one of the most positive ways of ensuring that the country and individuals benefit from the new technologies that are available.

E-commerce

Dr. George Turner: What action he is taking to ensure that changes in the price structures for high bandwidth telecommunications encourage the rapid development of e-commerce. [111534]

The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): We want fast cheap internet access to be available to everyone. That is why I welcome the recent announcements from BT and Telewest. We are promoting greater competition in fixed and mobile telephones, which will give consumers more choice and lower prices.

Dr. Turner: I thank the Minister for the progress that is being made. Does she recognise that in the past, rural areas, which in many cases could benefit most from good IT communications, compensating in part for poor physical communications on occasion, have often been the last to see improvements in IT structure? Does she acknowledge that there is a strong case for the Government to put pressure on the regulator and on the companies to ensure that rural as well as urban environments have ready access to fast internet speeds?

Ms Hewitt: My hon. Friend makes an extremely important point. I believe that when we release spectrum for fixed wireless access, as we will later this year, that will be of considerable benefit to rural areas, as will the development of new satellite services. Of course I will consider whether there is further action that we can take to roll out broad band quickly in the most remote rural areas.

Mr. David Ruffley: Can the Minister confirm that the unbundling of the local BT loop before 1 July 2001 cannot take place without the agreement of both Oftel and BT? In the light of that, can the Minister tell us whether such agreement has been forthcoming?

Ms Hewitt: As my right hon. Friend the Chancellor of the Exchequer made quite clear, it is a matter for agreement between Oftel and BT. The date of July 2001 has been agreed for local loop unbundling, and the Director General of Oftel has made it clear that if the practical problems can be resolved more quickly, that date will be brought forward.

Mr. Dale Campbell-Savours: My hon. Friend referred to recent announcements by BT. In fact, BT has promised nothing. It insists on maintaining its high charges for local calls; it says that it may be prepared to reduce them at some stage in the future. What are we

doing to make BT reduce its charges for millions of people in this country for internet use? It is blocking development in this area and should be stopped.

Ms Hewitt: BT has made two announcements recently, the most recent of which concerns an unmetered internet access subscription for £9.99 a month, giving unmetered access for evenings and weekends.

Mr. Campbell-Savours: When?

Ms Hewitt: It was available from yesterday. The other announcement is about the Surftime package. I am confident that BT and Oftel will be able to agree an early date for the introduction of Surftime on both a wholesale and a retail basis.

Mr. Alan Duncan: Events this morning are unfolding which show that the Secretary of State is presiding over a Department in a complete and utter shambles. It is no wonder that word has it that he wants to leave. The first draft of the Electronic Communications Bill was the unsatisfactory product of a turf war between the Department of Trade and Industry and the Home Office. We are now seeing communications move rapidly from fixed wires to wireless technology. There is now a turf war between the DTI and the Department for Culture, Media and Sport on who will regulate high bandwidth telecommunications.
Telecommunications has been taken out of the Utilities Bill, which is collapsing in disarray. Who will oversee high bandwidth telecommunications, and why were telecommunications removed from the scope of the Government's Utilities Bill?

Ms Hewitt: The hon. Gentleman is talking nonsense. If he had read the joint statement made by my right hon. Friends the Secretaries of State for Trade and Industry and for Culture, Media and Sport, he would know that the two Departments are working closely on a White Paper that will deal with future regulation of the converging industries.

Business Start-ups

Mrs. Louise Ellman: What new measures he plans to introduce to assist entrepreneurs to set up new businesses. [111535]

The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): The new small business service will offer information and advice to anyone who wants to set up a new business through an internet-based gateway. We are creating a volunteer business mentoring programme, and we will support community finance initiatives to help people start businesses in disadvantaged areas.

Mrs. Ellman: Will my hon. Friend meet me and others to discuss proposals for a community-based investment fund in Toxteth, Liverpool? Does she agree that every possible effort should be made to support entrepreneurship in the inner city?

Ms Hewitt: I entirely agree, and I should be delighted to meet my hon. Friend and her colleagues who have


taken an important initiative. I cannot make a prior commitment, but we shall establish this year a £30 million phoenix fund designed to back business start-up and community finance initiatives in disadvantaged areas.

Mr. Nick St. Aubyn: One of the most important contributions to the start-up of new businesses is made by information technology consultants who may be employed on an occasional basis. Does the Minister share the view taken by the Secretary of State that consultants who order their affairs so that they accumulate capital in their business rather than paying out money as salary are tax dodgers and evaders, against whom, presumably, criminal sanctions should apply? Are those people not in fact exactly the sort of entrepreneurs we should encourage rather than driving them overseas?

Ms Hewitt: IT contractors and others who are genuinely self-employed will continue to be treated as such. Those involved in tax avoidance will, however, be dealt with under anti-avoidance measures, and I am sorry that the hon. Gentleman does not support that.

Ms Debra Shipley: Does my hon. Friend agree that young people are the future of businesses in Britain? What words can she offer those leaving colleges and schools in Stourbridge to encourage them to go into business and, in particular, to go into business for themselves or set up new businesses?

Ms Hewitt: My hon. Friend makes an important point. The new national enterprise campaign, which will be launched by the Confederation of British Industry and British Chambers of Commerce, will, I hope, attract many young people leaving college or university into self-employment and business start-up by showing them shining examples of entrepreneurs who have done just that?

Mr. Nick Gibb: What extra costs does the Minister believe that highly regulatory and interventionist measures such as the Utilities Bill will impose on entrepreneurs, particularly in the IT and telecoms sector? The Government have today announced the embarrassing withdrawal of all the telecomms sections of the Utilities Bill; would they also consider withdrawing the plethora of regulations that are costing business £5 billion a year and stealth taxes on business costing £25 billion?

Ms Hewitt: No. Let me remind the hon. Gentleman of what the shadow Secretary of State, the hon. Member for Tiverton and Honiton (Mrs. Browning), said recently. She said on regulation that:
as a Minister under the previous Government … We would be the first to say that we did not do very well.—[Official Report, 19 November 1999; Vol. 339, c. 250]
The fact is that the Organisation for Economic Co-operation and Development concluded in its report last December that after two and a half years of Labour Government, the United Kingdom had less economic and administrative regulation than any other OECD country, including the United States of America. We are continuing to improve the regulatory environment and to simplify conditions for businesses.

Airbus

Mr. Peter L. Pike: When he will announce his decision on Government aid for the new Airbus project. [111536]

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alan Johnson): Discussions with BAe Systems on launch investment to secure UK participation in the Airbus A3XX project are well advanced.

Mr. Pike: The Minister will be aware that the project is of importance not only to British Aerospace, but to the aerospace industry in my Lancashire constituency and, indeed, throughout the whole country. It is important that the project should go ahead; the industry is waiting for a decision on that and on two major military projects, which are essential for its future success.

Mr. Johnson: My hon. Friend is right. I have met representatives from BAe Systems and from the work force and am well aware of the ramifications, and of the fact that 20,000 jobs depend on the success of Airbus. Incidentally, last year the company secured more than 55 per cent. of the market for large, civil aircraft. We hope to make an announcement soon. We are well aware of the valid points made by my hon. Friend.

Miss Anne McIntosh: Will the Minister join me in paying tribute to Airbus and its contribution to employment and to the aviation industry? Will he please make an early decision on support for the new Airbus project? Will he also condemn practices pursued in other countries—notably the US, where the fly American policy means that all American personnel have to fly on American carriers?

Mr. Johnson: I agree with the points made about the value of BAE Systems and the success of Airbus. Last October, we announced DTI funding of £2.45 million for an important competitive initiative of which Airbus is an important part. There should be fair competition rules and we hope to make an announcement on the Airbus project soon. We realise that A3XX is crucial to the future of Airbus and to BAe Systems.

Madam Speaker: Questions 8 and 11 are deferred until 12.30.

Businesses (North-west)

Mr. Colin Pickthall: What assessment he has made of the impact of industries set up in the north-west with the help of his Department on similar enterprises in the same area. [111538]

The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): A key element in determining regional selective assistance is an assessment of the impact of the investment on national and regional economies and on relevant industrial and commercial sectors.

Mr. Pickthall: Is my right hon. Friend aware of the case of Europanel in Skelmersdale? It was a thriving


manufacturing concern until a foreign firm opened up in a neighbouring town with the help of the DTI and of DTI grants. Does she agree that we must be much more thorough in assessing the impact on neighbouring firms when we put public money into supporting much needed inward investment in the north-west? Does she further agree that it is unacceptable that the taxpayers of Skelmersdale should, ironically, contribute to the removal of jobs from the town?

Mrs. Liddell: I agree with my hon. Friend that it is important to ensure that no displacement occurs as a consequence of regional selective assistance. I am aware of the case to which he refers. I understand that my right hon. Friend the Minister for Trade met the company in October last year. Should the company want to consult the Government office of the north-west about the possibility of further assistance, officials are ready to hold discussions and will do everything that they can to help the company.

Mr. Graham Brady: Does the Minister agree that the Government too can take important decisions? Does she agree that the Synchrotron project in Daresbury has given a massive boost both to business and to the academic community in the area? Does she understand the importance of allocating the Diamond project to Daresbury and that it should not go to Oxfordshire? People throughout the north-west—of all parties—want to see that. When shall we have a decision?

Mrs. Liddell: When I visited Runcorn a few weeks ago, the point about Daresbury was powerfully made to me. I realise the strength of local opinion—not least on the part of my hon. Friends who have fought well for the Synchrotron project. A decision has not yet been made, but it should be made shortly.

Grant Aid

Mr. David Kidney: If he will make a statement on his Department's policy for giving grant aid to areas of England outside those with assisted area status. [111540]

The Parliamentary Under-Secretary of State for Trade and Industry (Dr. Kim Howells): Under European Commission law, regional state aid can be paid only in assisted areas approved under article 87. It is also possible to grant aid under other provisions. For example, the new enterprise grant areas have been proposed under the small firms guidelines, and SMART—the small firms merit award for research and technology—operates under the research and development guidelines.

Mr. Kidney: I thank my hon. Friend for that answer. The Department closed the partnership investment programme at the end of the year. I was told that the reason was that the EC had decided that gap funding to private sector developers, outside assisted areas and above aid intensity limits, was in breach of state aid rules. That raises the alarming spectre that no state aid, however much it is justified, can be paid outside assisted areas.

Can my hon. Friend assure me that schemes such as those he described can be funded throughout the country when the circumstances are justified?

Dr. Howells: I can certainly confirm that the Government have a comprehensive package of measures to tackle need in the regions effectively. The proposals for new assisted areas are part of that package. The single regeneration budget, in particular, supports a wide range of regeneration schemes run by local partnerships in England to target pockets of deprivation in urban and other areas. I note that Partnership in Staffordshire was awarded substantial funding to promote the regeneration of rural communities. In addition, third tier is a flexible measure to aid regional development and to respond to local economic crises. That will be reviewed after an initial period of 12 months in conjunction with regional partners.

Mr. Richard Page: I understand that the Secretary of State for Trade and Industry recently met the Commissioner in charge of assisted area status. Can the Minister possibly give us some idea of the representations that the Secretary of State made and what steps the Department of Trade and Industry will take to make sure that any distribution that comes from the European Union or the Government will be made fairly and equitably and—I look the Minister straight in the eye—on the basis solely of need?

Dr. Howells: I welcome the hon. Gentleman to his new post; it is always good to see him. My right hon. Friend the Secretary of State for Trade and Industry will meet Commissioner Monti this afternoon and will, no doubt, discuss these very matters.

Mr. Richard Burden: May I ask my hon. Friend to ask my right hon. Friend the Secretary of State to impress on Commissioner Monti the fact that the issue of state aid to Rover-BMW at Longbridge has been with the Commission for several months? That state aid is of vital importance to retaining strategic production inside the European Union and it is not unreasonable to expect the Commission to come up with a positive decision on that aid by the spring, as has been indicated before.

Dr. Howells: I am absolutely sure that my right hon. Friend the Secretary of State heard those words and that that will be a subject for discussion with Commissioner Monti this afternoon.

Mr. David Heath: Does the Minister recognise that, between the over-hyped and overheated regional shopping centres and the assisted areas, which are quite rightly receiving support, there are small market towns throughout the country that are dying on their feet? Will he target support at that sector? In particular, will he talk to the Department of the Environment, Transport and the Regions about the iniquitous uniform business rate and its effect on small businesses in market towns?

Dr. Howells: I am sure that the hon. Gentleman will himself want to make those points to Ministers in the Department of the Environment, Transport and the


Regions. We recognise very much the difficulties of isolated pockets of deprivation and need throughout the country and we are addressing them in all the proposals that we have for regional regeneration.

Steel Industry

Mr. Denis MacShane: What assessment he has made of the impact of the strength of sterling on the United Kingdom steel industry. [111543]

The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): The Government are well aware of the concerns of the steel industry in relation to the strength of sterling. However, the steel industry itself has worked hard to improve its competitiveness. Although exports fell in 1999, the prospects for increasing exports in 2000 are much improved, especially in the light of recovery of the south-east Asian market.

Mr. MacShane: I am grateful for that answer, but my right hon. Friend will know the very great fear in the steel communities of the United Kingdom about the loss of jobs as a result of the over-valued pound, which was inherited from the previous Government. Will she—and my right hon. Friend the Secretary of State if he is available—agree to meet a delegation from the steel communities to discuss this very great concern?

Mrs. Liddell: I am very happy to agree to meet representatives of the steel industry. I represent a steel constituency, so I am well aware of the issues. The Government's priority remains to put economic management on a stable, long-term footing by reform of both monetary and fiscal policy. The worst thing that could happen for the steel industry would be to return to the short-term fixes of the previous Government, bringing the boom and bust that so unsettled the industry over the past 20 years.

Mr. Dafydd Wigley: Does the Minister not accept that in steel plants, such as Llanwern and Ebbw Vale, there is great concern that the high value of the pound will undermine their on-going viability? Will she give a categoric assurance that her Department will take up with the Chancellor of the Exchequer, in the context of the forthcoming Budget, the question of getting a fair parity for the pound that will give some chance for the plants that I mentioned? Their closure would be an absolute disaster for those areas.

Mrs. Liddell: Hon. Friends who represent those constituencies have made representations about the steel industry in that area. Approaches to Corus have revealed that speculation about Llanwern is based on press speculation. It would be unfortunate—and I am sure the right hon. Gentleman would not seek to do it—to spread fear in those communities about the possibility of further unemployment.
My right hon. Friend the Chancellor is well aware of the need to ensure a stable economy in the United Kingdom. We now have one of the strongest economies in the world. What we must seek to do is to ensure that all our industries benefit from the competitive advantage that can be brought about by increases in productivity and increases in output across the board for those industries.

My right hon. Friend's main priority will be to ensure a stable economy and a stable exchange rate in the medium and long term.

Mrs. Angela Browning: The pound is strong against the undervalued euro, but we do not see such discrepancies so much in terms of the pound's valuation against the American dollar. Given that the right hon. Lady and her friends are proponents of scrapping the pound and taking us into the euro, what in her view is the optimum exchange rate between the pound and the euro?

Mrs. Liddell: I am sure the hon. Lady knows rather more about how exchange rates work than her question appears to suggest. The Government believe that the decision about the single currency and sterling should be based on the best economic performance of this country, not on some arbitrary date that seems to have been dreamt up by the hon. Lady and her friends to try to heal divisions within the Conservative party. The main priority on the Government Benches is to have a sound economy whereby competitive businesses can ensure further growth, not just in Europe, but in competing against other economies such as the United States and Japan.

Internet

Mr. Ian Bruce: What measures he is taking to encourage greater use of the internet. [111544]

The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): We are driving through competition, to get internet access prices down; we are helping small businesses get the advice and training they need; and we are connecting schools, libraries and community centres to the internet.

Mr. Bruce: I am surprised that the Minister for Small Business and E-Commerce does not know that the Government are not responsible for any of those things. What the Government do know is that they are responsible for the Electronic Communications Bill, and I have congratulated the Department of Trade and Industry on taking out the worst parts of that Bill. Is the hon. Lady aware that her colleagues in the Home Office are busily reinforcing in spades those very developments which will help close down our internet access? Is she also aware that her colleagues in the Committee considering the Utilities Bill said this morning that they are taking out all its telecommunications regulation, and that in this Parliament we shall not end up with any revision of such regulation, which is probably going over to the Department for Culture, Media and Sport? No doubt water is going to the Department of the Environment, Transport—

Madam Speaker: Order. I ask the hon. Gentleman to put his question.

Mr. Bruce: Is not the Minister going to resign, because she has nothing left to do?

Ms Hewitt: No.

Fiona Mactaggart: Is my hon. Friend aware that to date the United Kingdom has been a very positive environment for e-commerce, but will she look at consumer issues related to e-commerce and proper protection of consumers against concealed information being taken from their computers when they are using the net and buying things over it?

Ms Hewitt: I recently launched Trust UK, a system of hallmarks for accredited codes of practice, which will enable consumers buying from accredited British websites to know that they are dealing with reputable organisations and that they can deal confidently. I am hopeful that we can get a similar set-up at the European level in order to give consumers the trust and confidence they need in electronic commerce.

Export Credits Guarantee Department

Mr. Gerald Howarth: What discussions he has had with other departments on the review of the remit of the Export Credits Guarantee Department. [111545]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): I asked Cabinet colleagues to advise me of issues that they wished to see covered by the review of ECGD's mission and status, and this was reflected in the terms of reference for the review.
In addition, I shall discuss the recommendations of the review team with colleagues.

Mr. Howarth: I hope that the Secretary of State will acknowledge the extremely important part played in British industry by defence exports. Britain is the second largest exporter of military goods in the world, and this enables us not only to help our friends, but to ensure that we have economies of scale in the production of defence equipment for our own forces.
Can the Minister assure me that ECGD support will continue to be available to major British companies such as BAe Systems, and that there will be no plans for the Government to curtail exports as the Chancellor of the Exchequer has sought to in respect of 63 countries, only one of which has been a beneficiary of ECGD support for defence exports in the past 12 years?

Mr. Byers: The ECGD's role is very important to many major exporters in the United Kingdom, including the defence industry. I think the hon. Gentleman will find when we announce the outcomes of the review that the defence industry will, where appropriate, continue to receive export credits as it does now.
It is always a question of striking the right balance. I believe that when we present our proposals in the light of the review, the right balance will be struck—a balance that recognises the importance of the export licensing regime, which is entirely different from the export credits

guarantee regime. The two should not be married. In my view, export credits have a distinct role to play, and they will continue to do so.
We need to change the system to reflect the needs of particular sectors. I do not think that the small and medium-sized enterprise sector uses export credits as much as it might, but I do not believe that any issues arising from the review will cause concern to those of us who feel that export credits have an important role to play in supporting British exporters generally—and that includes the defence sector.

Mr. Geraint Davies: Will my right hon. Friend confirm that most export credits are non-defence credits? On a wider issue, will he confirm that we are taking on a new role in relation to debt relief for emerging markets and third-world countries, while also lowering tariffs to facilitate market access? In that context, do not export credit guarantees hold the key to enabling countries that have suffered severe poverty to catch up with the western world in terms of economic growth?

Mr. Byers: My hon. Friend makes an important point about the positive role that export credits can play in helping countries to develop their own economies. The Government certainly intend to do that, which is why we have concentrated on productive expenditure, especially in the case of the least-well-developed countries. Such countries need to commit their finance to projects that will make economic growth possible. That will form a crucial part of the ECGD's role in the future, and can, I think, be compatible not just with supporting British business, but with our development objectives.
I hope that, when we announce the outcome of the review in a few months' time, the House will see that we have struck the right balance between our two aims. They are not in competition with each other: we want to unite the interests of British business with countries' development needs.

World Trade Organisation

Mr. Oliver Heald: What discussions he has held with his international counterparts on future progress with WTO negotiations. [111546]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): Since Seattle, I have been in contact with a number of my international counterparts from both the European Union and the rest of the world to discuss reform of the World Trade Organisation and the launch of a new round. Most agree on the need to launch a new round as soon as possible, and the need for reform of the WTO.

Mr. Heald: Does the Secretary of State agree that almost nothing is more important than for Britain to fight for global free trade, and to lower European Union tariff barriers? Is he aware that the Secretary of State for International Development has said that his Department will take a strong lead in trying to reform the WTO' s procedures following Seattle? Can he report any progress


at all? He has told us that he has had meetings, but has any progress been made? This is a very important issue for Britain and British trade.

Mr. Byers: I agree that it is an important issue, and progress is being made.

Mr. Heald: What progress?

Mr. Byers: If the hon. Gentleman can wait, I will tell him.
The reform programme will now have two parts. There will be some specific and rather technical changes, which are being discussed in Geneva; we hope to conclude those discussions by the end of this month. We also see a need for more fundamental WTO reform, which will take longer, because the WTO operates on the basis of consensus: an individual member can block progress. The more radical reforms will take time, but I think that engaging in a dialogue—which is what we are doing—will give real opportunities for substantial reform, hopefully within a year or 18 months.

Mr. Harry Barnes: Is the Secretary of State aware that only a small percentage of the money that changes hands internationally from day to day is for trade in goods and services, and that the great bulk is concerned with capital speculation? Is that problem discussed with equivalent Ministers at meetings of the World Trade Organisation? We should begin to propound the idea of an international tax on capital speculation; then we would be able to tackle some of the problems faced by third-world nations.

Mr. Byers: My hon. Friend has always had interesting ideas. The WTO has been considering the question of investment in the context of its rules. Issues of international capital exchanges are more correctly the remit of the International Monetary Fund, and my hon. Friend will be aware that the IMF has adopted procedures to try to restrict sudden flows of capital in and out of particular countries. That has been successful over the past 12 or 18 months, and that is probably a more appropriate path than the one suggested by my hon. Friend, which I would not want to follow.

EU Structural Funds

Mr. Andrew George: What progress has been made in completing funding negotiations for EU objective 1 regions; and if he will make a statement. [111547]

The Parliamentary Under-Secretary of State for Trade and Industry (Dr. Kim Howells): The UK's objective 1 programmes were submitted to the Commission last year, and the Commission has now formally responded to some of them. Discussions are continuing and I hope that the programmes will be agreed to.

Mr. George: I am grateful to the Minister for that reply, but is he aware that even the enterprise grant fund referred to in an earlier reply will deliver only £75,000 per annum to the objective 1 region of Cornwall?

Does he accept that rather than encouraging unemployed people to apply for non-existent jobs in objective 1 areas, as the Chancellor of the Exchequer is to do, it would be far better to invest public money to ensure that we can draw down the available funds in objective 1 regions to generate jobs and regenerate those economies?

Dr. Howells: The Government are concerned to ensure that productive employment is retained in areas such as the one that the hon. Gentleman represents. I understand that the Government are working with all objective 1 areas to help them to identify match funding. My right hon. Friend the Chief Secretary to the Treasury said on 3 February:
All departments and Government offices will work closely with the areas to benefit, to ensure that they get the match funding that they need.—[Official Report, 3 February 2000; Vol. 343, c. 1191.]

Mr. Alan W. Williams: Although I accept that the Chancellor cannot make a final announcement about match funding until he has the results of the comprehensive spending review, will the Minister's Department put maximum pressure on the Treasury to make sure that match funding exists, and ask whether the Treasury can give any early indication on it? Most importantly, does the Minister agree that, in objective 1 areas, the emphasis must shift to devising schemes for infrastructure, skills training and improved opportunities for the work force, so that when the objective 1 funds are available, we can take maximum advantage of them?

Dr. Howells: My hon. Friend makes an important point. I am very much in favour of the projects to which he has referred. I am confident that the funding will be found, and that we will proceed with that important aid. However, I am interested in the quality of the projects, and it is no use propping up projects or ideas that are not of sufficient quality to be sustainable or to make a difference to the areas that they seek to help.

Mr. Christopher Chope: Can the Minister assure the House that in meeting the match funding for Cornwall's objective 1 status, other counties in the south-west will not suffer?

Dr. Howells: We cannot move the assisted areas map east to Dorset, as I am sure the hon. Gentleman would like. He will know that certain criteria have to be met; we will stick strictly with those criteria and ensure that, within them, assisted areas are helped properly.

Recycling

Dr. Alan Whitehead: What steps his Department is taking to encourage use of recycled materials. [111548]

The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): On 31 January, we made a call for proposals under the DTI's recycling programme. The programme can provide funds to support research,


development and demonstration projects that have the potential to create substantial new demand for recycled materials.

Dr. Whitehead: I thank my hon. Friend for that answer. Does she consider that at just over £1 million, the DTI recycling programme will have great impact? Does she agree that a greater impact could be achieved by a programme of deposits at the point of sale of consumer goods, which could be redeemed on presentation of the goods for recycling or disposal?

Ms Hewitt: I am indeed confident that £1 million worth of pump-priming money will have a helpful impact. I am aware of my hon. Friend's support for a deposit system for white goods. We will consider that when we see the draft European directive on electrical and electronic waste, which is likely to propose a collection and recycling target.

Mr. John Bercow: Is the Department considering whether it is technically possible to recycle orimulsion?

Ms Hewitt: I am sure we are.

Mr. Christopher Leslie: On a different subject from orimulsion, will my hon. Friend consider encouraging drinks manufacturers also to operate a deposit and return schemes? Not only would that help to encourage recycling and reduce landfill, but it would help to clean up the streets.

Ms Hewitt: I well remember as a child collecting bottles with the intention of getting the deposit back on them, and very popular that was, too, so of course I will look into that.

Business Failures

Mr. John Wilkinson: What assessment he has made of the trend in the number of business failures in the current financial year; and if he will make a statement. [111549]

The Minister for Competitiveness (Mr. Alan Johnson): Business failures in October to December 1999, the third quarter of this financial year, were lower than in either of the two previous quarters. The figures are well below those seen as a result of the 1991 recession.

Mr. Wilkinson: I am grateful to the hon. Gentleman for his answer, which is reassuring as far as it goes, to the end of the last calendar year. Can he assure the House that the disparity in the economy between the potentially overheating south-east and the rather more depressed midlands and north will not get worse? Will he, with the Treasury, ensure that the Government do not rely on interest rates set by the Bank of England alone to keep the economy in balance, and that the interests of small and medium-sized enterprises will be borne in mind, as they have a great burden of regulation and form-filling to cope with?

Mr. Johnson: It is good of the hon. Gentleman to join us. I can give him an assurance that the trend is good. In the same period, 26,000 more small businesses started than were made insolvent, which is one of the best records that we have seen. Because of the economic cycle, the trend for insolvency does not feed through for a while, so the upturn in the last quarter will be reflected more fully in the economic position in the year to come.

Mr. Owen Paterson: Are not more businesses likely to fail if 30,000 skilled IT workers are driven abroad by IR35?

Mr. Johnson: No.

Manufacturing (East Midlands)

Mr. Vernon Coaker: What recent assessment he has made of the performance of manufacturing industry in the east midlands region. [111551]

The Minister for Competitiveness (Mr. Alan Johnson): Some traditional sectors of manufacturing in the east midlands have continued to suffer, particularly in the clothing and textile sectors. Many other sectors of manufacturing, including those in higher technology and higher value added areas, are faring much better. Overall, the regional economy is improving, with business confidence and profitability growing.

Mr. Coaker: I thank my hon. Friend. Contrary to earlier remarks, may I say that the East Midlands development agency is doing a first-class job in trying to stimulate the economy in the region? There is a mixed picture, with some parts doing very well. I urge my hon. Friend to take particular note of the problems experienced by the clothing and textile sector. Will he meet representatives of that sector and do what he can to stimulate those industries?

Mr. Johnson: We are aware of the problems in the textile sector. We are meeting representatives of the textile industry on a continuing basis. We are consulting about setting up manufacturing centres of excellence around the country. That will help all manufacturing industries, especially the textile industry.

Madam Speaker: I call Mr. Michael Connarty.

Hon. Members: Where is he?

Madam Speaker: I call Mr. Mark Todd.

Hon. Members: Where is he?

Domestic Energy Policy

Mrs. Linda Gilroy: What part his domestic energy policy plays in eliminating social exclusion. [111555]

The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): Fuel poverty affects about 5 million households in the United Kingdom. It leads to thousands of extra winter deaths annually and is a significant cause of ill health among some of the most vulnerable people in society. It therefore represents an important facet of social exclusion. The Government's energy policy tackles the problem in several ways. Promoting competition in energy markets leads to reduced prices; the energy regulator's social action plan will help poorer consumers; and the problem of poor housing is being tackled through the improved home energy efficiency scheme and the home investment programme. I have also set up a ministerial group to ensure better co-ordination of issues that relate to fuel poverty across Government.

Mrs. Gilroy: Does my right hon. Friend agree that one of the most difficult challenges in tackling fuel poverty relates to the private rented sector? Will she congratulate companies such as PowerGen, Transco, TXU and Eastern Energy on some of the imaginative projects that they have introduced recently? In her discussions with those companies, will she urge them to do as much as they can to tackle the problem?

Mrs. Liddell: I am happy to join my hon. Friend in congratulating companies that have taken action on affordable warmth. They serve as leaders to the industry. I have asked the Electricity Association services task force to act to ensure that the highest possible standards are met, not only for those in the private rented sector, but for all those who are affected by fuel poverty, especially those who pay for their fuel through pre-payment meters.

Madam Speaker: I call Mrs. Margaret Moran.

Hon. Members: Where is she?

Madam Speaker: I call Mrs. Helen Jackson.

Hon. Members: Where is she?

Madam Speaker: I call Mrs. Maria Fyfe.

Hon. Members: Where is she?

Madam Speaker: I call Mr. Gordon Prentice.

Hon. Members: Where is he?

Madam Speaker: I call Mr. Anthony Steen.

Hon. Members: Where is he?

Infotech 2000

Mr. Andrew Dismore: If he will make a statement on the activities of Infotech 2000 Ltd. in relation to the promotion of Islamic fundamentalist causes overseas. [111563]

The Minister for Competition and Consumer Affairs (Dr. Kim Howells): It is not the Department's policy to comment on the affairs of particular companies. If my hon. Friend has any information that he believes should be brought to the Department's attention, he should do that as soon as possible.

Mr. Dismore: My hon. Friend knows that the activities of Infotech 2000 have caused some concern. It probably exploits company law to raise funds for fundamentalist, extremist and terrorist causes overseas, and to recruit volunteers to fight in those causes. Will the Department examine company law to ascertain whether the abuses in which the company has been involved can be reviewed? I refer specifically to the laws on fundraising for political purposes, especially overseas.

Dr. Howells: A comprehensive review of company law is currently under way. The Department has an efficient and active companies investigation section. I am sure that its staff will have listened to my hon. Friend's words.

Milk Marque

Mr. Owen Paterson: What recent representations he has received on the future structure of Milk Marque. [111564]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): I congratulate the hon. Gentleman on being here. [HON. MEMBERS: "Unlike your lot."] It is a close-run thing.
Since 4 November 1999, when the members of Milk Marque voted in favour of the board's proposals for the voluntary break-up of Milk Marque, the Department has received nine letters from hon. Members and members of the public on anxieties about the dairy industry. Two parliamentary questions have also been asked.
I welcome Milk Marque's decision, which gives the industry the opportunity to form new, closer and beneficial relationships between milk producers and other industries.

Mr. Paterson: How can breaking up Milk Marque help to establish efficient producers of dairy products when continental competitors such as MD and Arla are already twice as efficient as our own dairy producers?

Mr. Byers: As the hon. Gentleman knows, I shared the concern about the compulsory break-up of Milk Marque, which was the recommendation from the Competition Commission. For that reason, I did not agree with that recommendation, but the members of Milk Marque themselves decided that, on a voluntary basis, they would agree to breaking Milk Marque up into three successor organisations. That was a decision for the members of Milk Marque and that is wholly appropriate in the circumstances.

Madam Speaker: We now return to Questions 8 and 11.

Regulation

Sir Sydney Chapman: What plans he has to reduce the burden of regulation on business. [111537]

Mr. Michael Fabricant: What steps he is taking to reduce the regulatory burden on business. [111541]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): We keep under review all measures that may increase the burden of regulation on business. As a result, we have been considering the views expressed by the telecoms operators in relation to the provisions in the Utilities Bill. We intend to publish a communications White Paper later this year. I believe that there is a powerful argument for dealing with the reforms needed in one measure. I have therefore decided to remove the telecoms provisions from the Bill. In addition, we shall remove the provisions relating to water, and the Department of the Environment, Transport and the Regions will instead introduce measures covering those matters in a draft water Bill, which it intends to publish later this year. That will enable Parliament to consider proposed changes to the water regime alongside other proposals resulting from the review of competition in that sector.

Sir Sydney Chapman: I am staggered that the Secretary of State sees fit to hang his important statement to the House on my equally important but somewhat unrelated question. Is not the truth that he has just butchered a flagship Bill because it is ill thought out? Returning to my question, what has his announcement done to reduce the 2,700 regulations introduced under his Administration, 17 of which alone, it is estimated, will cost British industry £10 billion in the lifetime of this Parliament?

Mr. Byers: The Conservative party's problem is that it is unable to distinguish between red tape and the need to provide decent standards for people in the workplace. Conservative Members regard the working time directive, paid holidays and the national minimum wage as red tape, but Labour Members know that they represent decent conditions for working people. Conservative Members oppose those measures, although we heard recently that their party now supports the national minimum wage. It would be interesting to hear the views of Opposition Front Benchers on that matter. We have in Committee a Bill that will cut the cost of electricity by 10 per cent. That is an important measure and we shall introduce the other proposals elsewhere in a more appropriate way.

Mr. Fabricant: I can see why the statement has been linked to my question: the Secretary of State recognises that the Utilities Bill is indeed a burden on business. He has now decided to scrap about half of it, despite the fact that BT made the recommendations over a year ago. The Bill was 170 pages long. Precisely how much has it cost the taxpayer to prepare it? How much has it cost the

taxpayer to have civil servants sitting in during consideration of it? Why does not he accept that it is a burden on business and dump the whole lot?

Mr. Byers: I must warn the hon. Gentleman that a London telephone directory is about to be brought into the Chamber and we shall be interested to see whether he can tear that in half as well.
There is an important issue here. The Government received strong representations from the telecoms operators after announcing on 3 February that there would be a communications White Paper. That announcement came after the debate on Second Reading of the Bill. Therefore, we listened to industry and its genuine concerns. We make no apology for saying, following its representations, that we believe—[Interruption.]

Madam Speaker: Order.

Mr. Byers: The proposals that were in the Bill received representations from the telecoms operators. We have listened to those. We feel that it is more appropriate to deal with the matter in the communications White Paper, which we have announced since Second Reading of the Utilities Bill. We will introduce it in the autumn. In the light of that, we feel that it is wholly appropriate to deal with the matter in that way. By doing so, we will reduce the regulation on the telecoms industry because it will not have two sets of regulations.

Mr. David Chaytor: On the general question of regulation, does my right hon. Friend agree that it is a question of quality as well as quantity? No one is arguing for increased bureaucracy, but does he agree that, in certain circumstances, quality is at the heart of the issue? For example, in view of the recent report by the nuclear installations inspectorate on the safety record of British Nuclear Fuels, does he not agree that there is an overwhelming argument for improving the quality of regulation in many industries?

Mr. Byers: My hon. Friend makes an important point. Where regulation is necessary—there will be circumstances where it is—it must be clear and precise and, wherever possible, produce the least burdens on business. There are clear issues to do with regulation of sensitive industries. I agree with him. Often, a combination of appropriate regulation and good, effective management is needed. In some cases, the two have not come together very often.

Mrs. Linda Gilroy: Does my right hon. Friend agree that the synthetic anger of the hon. Member for Lichfield (Mr. Fabricant) illustrates in its entirety the attitude of the previous Government: if we listen, we are damned, if we do not, we are damned, so why listen—and the previous Government did not listen? In not only listening but acting, will my right hon. Friend ensure that we carry forward the parts of the Bill that will help to reduce prices for all consumers, to tackle fuel poverty and to achieve regulatory certainty? In particular,


will he listen to the opinions of PowerGen, which, in a briefing to members of the Utilities Bill Standing Committee, said:
PowerGen supports many aspects of the Bill, including the objectives of improving the consistency, predictability and transparency of regulation, and bringing the regulatory framework up to date with the competitive markets that have developed since privatisation?

Mr. Byers: It is interesting that the Conservative Opposition have gone on record as being against the electricity and gas provisions in the Utilities Bill, measures that will reduce the wholesale price of electricity by at least 10 per cent. and address the whole question of fuel poverty—a point that was raised on the Opposition Benches. Those measures will remain in place.
I make no apology for listening to the concerns of business and industry. The Bill will be a better Bill because we have listened to the views of telecommunications operators. We will introduce measures in the communications White Paper. We are a listening Government, putting the interest of business first.

Mrs. Angela Browning: If I hear the Secretary of State say once more that he makes no apology, I think I shall puke. It is an outrage to the important global businesses involved in the four important sectors that are covered by the Bill, and an affront to the democratic process of the House that he did not have the guts to stand at the Dispatch Box and give a proper statement, with proper scrutiny by the House.
The Secretary of State talks about consultation. I refer him to his own words, 31 days ago at that Dispatch Box on Second Reading:
Our first action was not to rush into legislating, but to consult widely on the structures that would fulfil the needs of consumers, be good for business and provide a stable framework for utility companies.—[Official Report, 31 January 2000; Vol. 343, c. 788.]
He may have consulted, but listen he did not.
We warned the Secretary of State on Second Reading and we have warned him consistently in Committee that the Bill was flawed from the start. We warned him when the so-called flagship Bill from the Queen's Speech was put before the House, and I warn him again today, that he will come back to the Dispatch Box to answer questions on the issues because we will no longer put up with lectures from him about the utilities industries that have benefited from the way in which the Conservative Government privatised them.
It is incredible that the Secretary of State and his colleagues did not make the connection between telecommunications and broadcasting before they brought the Bill to the House. It is incredible that, apparently, he had no discussions with the Deputy Prime Minister about the future of the water industry. Goodness knows what will happen in the mélée that will now ensue.
This morning, I listened to proceedings on the Bill in Committee. Clearly, there is no timetable yet for the part of the Bill that deals with the water industry. We are now told that we have a White Paper, but that will not help the telecommunications industry. The Government must have

known about the White Paper before they drafted the Bill. What will happen to part IV, which deals with the Competition Commission and all four utilities sectors?
Why can the Secretary of State not do the decent thing and come to the House to answer detailed questions that are important to businesses not only in this country, but globally, which have now been thrown into disarray because of the shambles of the way in which he runs the Department and the pseudo way in which the Department and the Labour party are supposed to consult? It is about time that he started listening to people who know about these issues. He would not have done badly to listen to my hon. Friends in Committee—it was good advice, freely given—but he did not. Instead, he gave us arrogance and no apology. I warn him that his reputation and that of his Department is that they are unbusinesslike and do not know what they are doing. The Bill is a shambles. He should withdraw it and bring it back a second time.

Mr. Byers: It was interesting that the hon. Lady referred to advice from Conservative Members that was "freely given". I have to say that that is a rare occurrence. I make no apology for the way in which the Bill has been amended to reflect the interests of business. Let me take Opposition Members through the sequence of events since it was considered on Second Reading. On 3 February—[Interruption.]

Madam Speaker: Order. I will not have questions put from a sedentary position.

Mr. Byers: On 3 February, we announced that there would be a White Paper on communications policy. As a result of our announcement, of which the telecommunications operators were unaware until it was made, there were further representations to the Government from the industry in the light of the fact that there was to be a White Paper. There had been consultation before, but at that stage the telecommunications operators were unaware that there was to be a White Paper on communications. Further representations were made by the sector and, in the light of those representations, we decided to remove telecommunications from the Bill. As for the water industry, there is to be a water Bill to deal with provisions affecting that industry.
We still have a measure that will radically change electricity and gas trading. It will benefit millions of people and businesses. Therefore we make no apology for introducing a Utilities Bill that will benefit business and individuals. We make no apology for listening to the interests of business. We will put practical policies before political dogma, unlike the Conservative party.

Mrs. Gwyneth Dunwoody: I am delighted that my right hon. Friend is paying so much attention to business, but he will be aware that both those major industries are not ones that enjoy the unequivocal support of all consumers. Could he, therefore, tell us why it would not have been easier to have left them both in the existing Utilities Bill, and, subsequently, to table amendments on them in the interests of consumers—who, after all, may not have the same view of privatisation as Opposition Front Benchers?

Mr. Byers: In relation to the four areas that were considered in the Utilities Bill, and certainly in cases that are being considered, we shall have to ensure that the interests of consumers are effectively represented. I am confident that, when the measures on water and telecommunications are introduced, a strong voice will have to be given to consumers' interests. There will be such a voice on gas and electricity in the Utilities Bill.

Mr. Norman Baker: Is not this a case of joined-up chaos, rather than joined-up Government? The Secretary of State talks about the communications White Paper, but has he only just found out about it? The Government have been talking about it for months. Liberal Democrat Members warned him that it was sensible to deal with telecommunications in a telecommunications Bill, but he included provisions on telecommunications in the Utilities Bill. He has now discovered that they will have to be withdrawn.
Is there not a pitched battle between the Department of Trade and Industry and the Department of the Environment, Transport and the Regions on how to regulate water—with the DTI favouring a light touch and the DETR favouring a heavy one? Is not the truth that the

Deputy Prime Minister has taken his ball home because he has not been able to get his way on water regulation in the Bill?
The Utilities Bill is a shambles, and the Secretary of State will have to answer the question whether its remaining threads hang together at all.

Mr. Byers: We have a Bill dealing with gas and electricity that will make a very real difference to many thousands of people in the hon. Gentleman's constituency. He needs to be aware of that. If he is saying that the Bill should be withdrawn, he is saying that those benefits should be denied to his constituents. It is interesting—it is on the record—that that is his approach. I think that he will be condemned on that particular issue.
There is no disagreement between the Deputy Prime Minister and me on the need to deal with water within a water Bill: it is a sensible place to deal with it. As I said, on 3 February we announced that there will be a telecommunications White Paper. In the light of that, the operators themselves have made further representations. Our view is that we should take account of those representations, reflect on the issues and include them in a White Paper later this year.

Business Questions

Sir George Young: May I ask the Leader of the House to give us the business for next week?

The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for next week will be as follows:
MONDAY 6 MARCH—Second Reading of the Regulation of Investigatory Powers Bill.
TUESDAY 7 MARCH—Second Reading of the Criminal Justice (Mode of Trial)(No.2) Bill.
WEDNESDAY 8 MARCH—Opposition Day [7th Allotted Day].
Until about 7 o'clock, there will be a debate entitled "Financial Provision and Clinical Distortion in the National Health Service" followed by a debate entitled "Regulatory Burdens on Small Business". Both debates will arise on Opposition motions.
Supplemental Allocation of Time Motion relating to the Representation of the People Bill followed by consideration of any Lords amendments which may be received.
THURSDAY 9 MARCH—Second Reading of the Race Relations (Amendment) Bill [Lords].
FRIDAY 10 MARCH—Private Members' Bill.
The provisional business for the following week will be as follows:
MONDAY 13 MARCH—Progress on remaining stages of the Political Parties, Elections and Referendums Bill.
TUESDAY 14 MARCH—Conclusion of remaining Stages of the Political Parties, Elections and Referendums Bill.
The Chairman of Ways and Means is expected to name opposed Private Business for consideration at 7 o'clock.
WEDNESDAY 15 MARCH—Remaining stages of the Terrorism Bill.
Motion on the Prevention of Terrorism (Temporary Provisions) Act 1989 (Continuance) Order.
At 10 o'clock the House will be asked to agree the Spring Supplementary Estimates, Supplementary Vote on Account, Excess Votes and Defence Votes A.
THURSDAY 16 MARCH—Opposition Day [8th Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.
FRIDAY 17 MARCH—Debate on safeguards for children on a Motion for the Adjournment of the House.

Sir George Young: The House is grateful for details of next week's business and an indication of the likely business for the week after. I know that the whole House will welcome the fact that the debate on the Waterhouse report on child abuse will take place on the Floor of the House in Government time.
The right hon. Lady has announced a day and a half for the remaining stages of the Political Parties, Elections and Referendums Bill. Is she aware that that is a challenging timetable? It is a long constitutional Bill. During its passage, the Parliamentary Secretary, Privy Council Office has been characteristically generous in

volunteering to revisit large sections of it and possibly amend it. Does she believe that the House can give adequate consideration to that Bill in the allotted time?
Given that fact and the exchanges that we have just heard, is it not clear that the Government are trying to push too much ill-considered legislation through the House? The House is littered with the debris of Bills that seem to have been abandoned, such as the Fur Farming (Prohibition) Bill, those that are seriously damaged, such as the Utilities Bill, and others, such as the Freedom of Information Bill, which came out of Committee on 10 February and has not been seen since. Is the programme outlined in the Queen's Speech on track?
Will the right hon. Lady confirm that we shall have a debate in Government time on the intergovernmental conference White Paper? We still await a debate on the Wakeham report on reform of the House of Lords. Might we expect a statement next week from the Deputy Prime Minister on the Crow report, which has caused serious alarm in Hampshire and the rest of the south-east? As I am sure that the right hon. Lady knows, next Wednesday is international women's day. We normally have a debate on women's issues, which is of interest to the whole House. Will that take place?
Finally, does the right hon. Lady recall that, at the last business questions, I asked for a statement on the BBC licence fee? She replied:
I cannot tell him when an announcement on the licence fee will be made, although it will not be next week.—[Official Report, 17 February 2000; Vol. 344, c. 1105.]
On the next sitting day, the Government made a statement on the licence fee. Does she feel a pang of remorse at her reply?

Mrs. Beckett: I believe that there is adequate time for the Political Parties, Elections and Referendums Bill. It has some constitutional implications, but the right hon. Gentleman will be aware that we have been very generous with the time allocated for discussions so far. We expect that to be taken into account.
It is plainly not the case that there is too much legislation or that the programme in the Queen's Speech is not on track. We already have a substantial number of Bills in Committee, on Report, being prepared and on their way through the House. There is no question of the Fur Farming (Prohibition) Bill disappearing. The Government intend to pursue it, as we are pursuing the Utilities Bill. The Opposition are showing every sign of not learning from some of the mistakes that they made during the 1980s and 1990s. When I was first a Member of Parliament, it was an expected and normal part of the process of legislative scrutiny—indeed, it was the purpose of legislative scrutiny—that Governments listened to representations from other bodies outside the House and from the Opposition on the effect of legislation and might even change Bills as a result. It was only during Lady Thatcher's period that that became seen as a sign of weakness and incompetence. We see the consequences of that attitude in the diminished number of Conservative Members. Far from our legislation being ill-considered, the processes of the House are acting as they should.
The right hon. Gentleman asks for time for debate on issues such as Lords reform and international women's day and for a statement on the Crow report. It is clear from his remarks that he agrees that the Government have


to give priority to their legislative programme. He will be well aware of the way in which Opposition Members have sought to exploit the time and the means available to them. It is perfectly legitimate that they should do so and I make no complaint about it. However, the Government's priority is our legislative timetable. If he wants time to debate other issues—I have a great deal of sympathy with that—I suggest that he does something to prevent his hon. Friends from making undue and unnecessary use of time.
The right hon. Gentleman mentioned my comments about the statement on the BBC licence fee. I made those comments in good faith. He must have forgotten that he and a large number of other hon. Members made strong representations on that occasion, as they had on previous occasions, about the importance of an early statement on the subject. I am sorry that he apparently does not appreciate the power of his advocacy.

Mr. Peter L. Pike: My right hon. Friend will be shocked to hear that, within the past hour, TRW has announced 450 redundancies at the former Lucas factory in my constituency. Does she see any prospect of debating the motor and motor components industry at an early date?

Mrs. Beckett: I am sorry to hear of that announcement and I understand and share my hon. Friend's concern for his constituents. The Government have done a great deal to improve the way that we respond when such announcements are made. I cannot undertake to find time in the near future for a special debate on the motor industry but, as my hon. Friend was one of the strongest advocates of the extra time found for discussion and debate in Westminster Hall, he will be keenly aware of the possibilities that presents.

Mr. Andrew Stunell: When does the Leader of the House intend that the Fur Farming (Prohibition) Bill will return to the parliamentary programme? Following the withdrawal last night of the Nuclear (Safeguards) Bill, will the right hon. Lady confirm that that measure does not appear in the business programme for the next two weeks? Can the right hon. Lady give the House an assurance that technical but important Bill will reappear?
As to the Utilities Bill, does the Leader of the House agree—as Chairman of the Modernisation Committee—that the Government have a lesson to learn? A formal process of pre-legislative scrutiny might have been more appropriate, and it might have meant that one arm of government would have known that another arm was going to produce a White Paper. Then the telecommunications industry might have known the Government's intentions prior to publication. The tension and adrenalin that has flowed today could have been avoided by following the sensible procedures established in this parliamentary Session.

Mrs. Beckett: We have not withdrawn the Nuclear (Safeguards) Bill—it was not moved last night. It is an important technical measure.
The hon. Gentleman makes an important and worthwhile point about pre-legislative scrutiny and the Modernisation Select Committee. Perhaps understandably, the hon. Gentleman has not wholly taken on board the point made by my right hon. Friend the Secretary of State—who was of

course aware of, and involved in, discussions about a White Paper. As was highlighted by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), there are two slightly different processes.
The Utilities Bill as originally conceived was intended to bring a degree of consistency to the approach taken to regulation across those sectors, which is why the telecoms and water sectors were in the original Bill. When an announcement was made of further work on the telecoms sector not related to those patterns of regulatory approval, there were fresh and different representations from that industry suggesting that the effect would be one round of probably perfectly worthwhile regulatory change, succeeded in different circumstances by another round relating to a business that is fast moving. In those circumstances, the representations made by the industry were considered and changes were made.
It is intended that the water sections of the Bill, where different issues arise, will go through a pre-legislative scrutiny process with the water Bill. Such a process has already been announced. So the hon. Gentleman will get exactly that for which he asks.

Mr. Andrew Reed: Will my right hon. Friend find time as soon as possible for a debate on the welcome measures announced yesterday to improve road safety? Although I would like those measures to go further, such a debate would allow the House to contrast them with the answer that I received from the right hon. Member for Wokingham (Mr. Redwood) on 29 June 1999—that the Opposition would like to see the removal of bumps, chicanes and speed cameras as an impediment to cars. Would that not increase danger for the majority of pedestrians? As 103 child deaths a year are too many, may we have a debate on how to reduce that number as much as possible?

Mrs. Beckett: My hon. Friend is entirely right. I well remember the exchange to which he refers and the statement he elicited from the right hon. Member for Wokingham (Mr. Redwood). It is again a matter of creative tension between sensible regulation and red tape—and of the inability of the Conservative party to distinguish between the two.

Mr. Nicholas Winterton: Representing the interests of the House rather than the Government, does the Leader of the House think that it was appropriate for a Minister—in this case the Secretary of State for Trade and Industry—to use a parliamentary question to announce a major change in a piece of legislation?
Secondly, thousands of redundancies are being announced in the textile and clothing industry, in which I have taken an interest in all the 29 years that I have been in the House. Those redundancies are the result of companies locating their manufacturing capacity overseas, encouraged, very often, by our major retailers, and of the costs in this country, which are caused by Government regulation and action. Will the right hon. Lady therefore allow a debate about the crisis facing the textile and clothing industry, particularly the strategy document that has recently been published and put out for consultation by the textile and clothing industry trade organisations, including the trade unions?

Mrs. Beckett: I am well aware of the hon. Gentleman's long-standing interest in the industry and, indeed, in all


aspects of manufacturing. He knows that I share that interest. I recognise the concerns of the clothing and textile industry. I am aware of how successive Governments have sought to work with it to solve those problems. Knowing the hon. Gentleman, I am quite prepared to believe that he does not solely lay at the door of this Government the problems that the industry faces.

Mr. Winterton: indicated assent.

Mrs. Beckett: I am pleased to see that he agrees. However, I cannot undertake to find time for a further special debate on the industry, although I recognise the concerns that he identifies. I know that he and other hon. Members with similar interests will keep the matter under close scrutiny.
The hon. Gentleman also asked whether it was appropriate for the Secretary of State to announce the changes that have been made in the way that he did. We are in a somewhat difficult position. As he will appreciate, the Bill is being considered by a Standing Committee Upstairs. I do not think it unreasonable for me to share with the House the information that it was the very strong advice of the Clerks that, when a Bill is in that stage of its process through the House, it is the property of the Committee which the hon. Gentleman, given his long-standing contribution to Standing Committees, will understand. It was therefore felt that an announcement had to be made first to the Committee, and it was then a matter of getting the timing right so that the House was not deprived while the Committee was informed. Since it coincided with Trade and Industry questions, this was thought the best possible way of dealing with the slightly difficult technicality of the Committee being in existence and the Government wishing, as always, to show full courtesy to both the House and the Committee.

Dr. Tony Wright: When the Wakeham commission was established, it was asked to work to a very tight timetable so that we could make rapid progress on reform of the other House. It worked to that timetable and delivered its report against all the odds by the end of last year. Since then, nothing seems to have happened. We have not yet fulfilled our pledge to remove the hereditaries because nearly 100 remain. It is now urgent for the House to debate this issue and for a Joint Committee of the two Houses to be established, as promised, so that it can begin to work and we can move from an incomplete stage 1 to a proper stage 2.

Mrs. Beckett: My hon. Friend is remembering only half of what was said about Wakeham. We wished the royal commission to meet, discuss and come to a speedy conclusion so that the Government could then judge whether it was possible to see an emerging consensus which could be followed by further speedy action. [HON. MEMBERS: "Oh!"] Opposition Members groan but, if they look at the record, they will find that that has always and consistently been the view expressed from the Dispatch Box. It is well within my hon. Friend's memory, I am sure, that the Conservative party claimed that no such consensus would emerge, and has indeed done its best to ensure that it does not. The question of who wants to see progress on this is a different one.
I do not agree with my hon. Friend's remarks about the remaining hereditary principle. No one sits in the House of Lords on the basis of heredity any more. The procedures have been changed so that people are there through some mechanism related to their record and not to the record of their forebears.

Mr. Peter Brooke: I seek to follow the Government's logic by asking whether, if the water provisions had been first withdrawn, the Leader of the House would have withdrawn the telecommunications provisions, even if there had been no elusive White Paper on telecommunications?

Mrs. Beckett: The point that the right hon. Gentleman was seeking to make was, uncharacteristically, not entirely clear. The issues are separate and slightly different, but as proposals for change were to be made on each matter, it was sensible to make them together.

Mr. Tam Dalyell: Has the Leader of the House read the exchanges at column 1381 of Hansard on 22 February regarding rail safety? Is she familiar with the expression that something is "like painting the Forth rail bridge", which means that some process is going on and on and will never stop? Well, the painting of the bridge has now stopped because of an acrimonious dispute between Rigblast and Railtrack. Both as Leader of the House and as an engineer, has my right hon. Friend read Magnus Linklater's damning comment in The Times today that the whole business is a disgrace to our country? Much of the responsibility for that lies on The Mound, where today is being spent on a discussion of Gaelic, a language that only two Members there speak—and one of them badly. They are paying for simultaneous translation rather than attending to urgent engineering problems.

Mrs. Beckett: I understand, as the whole House does, my hon. Friend's proper concern for the Forth bridge, which is an important international monument. I am familiar with the expression—now a cliché I suppose—to which he drew attention, and I have read both the exchanges between my hon. Friend and my right hon. Friend the Secretary of State for the Environment, Transport and the Regions and the comments in The Times. I well understand my hon. Friend's concern, and shall draw his remarks to the attention of my right hon. Friend, who I believe is looking into the matter, and will write to my hon. Friend on it. Other than that, I am conscious of the courtesies required between fellow legislative bodies.

Mr. Archy Kirkwood: May I draw the Leader of the House's attention to the negative prayer in my name against statutory instrument 239, which introduces changes to jobseeker's allowance regulations? The purpose of the change is to increase the benefit penalty sanction to 26 weeks if an 18 to 24-year-old refuses a new deal option over 12 months. The Advisory Committee on Social Security has made helpful suggestions that would mitigate some of the adverse effects of that change. Will the Leader of the House use her good offices through the usual channels to seek Committee consideration of the regulations before their implementation, which, I understand, is intended to happen early in March?

Mrs. Beckett: I have seen the hon. Gentleman's prayer, and I understand his point. I shall draw his remarks to the


attention of my right hon. Friend the Secretary of State for Education and Employment. The hon. Gentleman asks me to see that the issue is raised through the usual channels; having been a usual channel himself, he will be well aware of how that process operates.

Mr. Paul Flynn: When can we debate early-day motion 2?
[That this House applauds the Government's intention to ensure that all pensioners entitled to income support receive it, making it a genuine minimum income guarantee; notes that, although the minimum income guarantee was introduced in April 1999, the promised national programme of measures to maximise take-up is still awaited; and urges the Secretary of State for Social Security to announce that claims made by pensioners after the date of that announcement will be treated as having been made on that date and that arrears of benefit will be paid accordingly.]
According to the Government's figures, 700,000 of the poorest pensioners will lose out on the so-called minimum income guarantee to an average of £18 a week. When will we begin the campaign promised in our manifesto? It was promised for April 1999 but, on 6 February 2000, the Minister of State, Department of Social Security promised that it would happen by the end of that month. He repeated that promise in Westminster Hall on 9 February, but we are into March and nothing has happened. Can we have a debate in which the Government can reassure the poorest pensioners, who were promised, but have been denied, a minimum income? It is worth recalling that the minimum income guarantee is the Government's main excuse for not restoring the link between pensions and earnings. We need a debate to make sure that the Government guarantee that the great losses suffered by the poorest pensioners because of delays in the take-up campaign will be backdated.

Mrs. Beckett: I am well aware of the long campaign that my hon. Friend—with other Members—has run on that issue. I do not entirely share the view that there has been no action and that no measures have been taken by the Government to promote the minimum income guarantee—although I am not even sure whether that is his proposition. However, I understand his point; despite the efforts made by the Government, we acknowledge that there are still too many people who do not take up their entitlement. I regret the fact that action might not have been taken as speedily as my hon. Friend had hoped and as Ministers had indicated. I shall draw his remarks to the attention of my right hon. Friend the Secretary of State for Social Security. I understand that a campaign will be mounted soon. I hope that my hon. Friend will understand that, after my recent experience in the matter of television licences, I am reluctant to offer a date.

Several hon. Members: rose—

Madam Speaker: Order. I should be obliged if hon. Members would put direct questions to the Leader of the House.

Mr. Stephen O'Brien: Tomorrow, I shall present my Food Labelling Bill for Second Reading. In the light of the sympathy of the Prime Minister, the Minister for the Cabinet Office and the Minister of

Agriculture, Fisheries and Food for better food labelling, may I expect Government support for the Bill—and if not, why not?

Mrs. Beckett: Offhand, I cannot tell the hon. Gentleman whether we will support his Bill. However, I can tell him that the Government have consistently promoted and pursued the cause of food labelling—in contrast to the party that he represents, which fought it all the way.

Mr. Harry Barnes: I realise that further statements can be made as developments take place in Mozambique. However, should not the House hold a debate on the crisis there? Our constituents expect a debate in the House so that we can all apply our minds to the massive problems in that country.

Mrs. Beckett: I understand and sympathise with my hon. Friend's wish to keep the matter before the House. As he is well aware, we have already discussed the matter on several occasions. However, as he appreciates, action is being taken to assist people in Mozambique—that is the most important thing—even though it is logistically difficult. I assure my hon. Friend that the Government will keep the matter under review, but I cannot promise time for a further debate in the near future.

Rev. Martin Smyth: As I am a non-smoker, the Leader of the House will appreciate that I do not advocate smoking. However, on a day when those who represent the tobacco industry are lobbying the House, would she remind the Chancellor of the Exchequer that it would be helpful for manufacturing industry if he did not continue to increase the taxation on tobacco? That hits not only an industry but many shopkeepers throughout the Province.

Mrs. Beckett: I understand the difficulties that arise over the taxation of tobacco, but the hon. Gentleman will understand that the matter also relates to health and that, too, is a burden on the economy. The Government have to try to balance both those important issues.

Mr. Barry Gardiner: I know that the Leader of the House will be well aware of the extreme disquiet among the Indian community in this country over the proposal for a visa bond pilot scheme. Although that anxiety was engendered by a mendacious piece of journalism that linked asylum seekers with a £10,000 bond, it is important that there should be discussion of the matter in the House at the earliest opportunity, so that it can be clarified for members of the Indian community who are extremely concerned.

Mrs. Beckett: My hon. Friend is right. I am aware of the concerns on those issues. I am also aware—as is he through his involvement in the Labour Friends of India organisation—of the need to air those concerns. I cannot undertake to find time for a special debate in the near future, but I draw my hon. Friend's attention to the fact that Home Office questions will be held on 13 March, when he may find an opportunity to raise the issue. Hopefully, he will hear a statement then that will ease the concerns of his constituents.

Mr. John Townend: The right hon. Lady will recall that, on 13 January, I asked whether she


would consider providing time for a further fishing debate. We had only half a day for the annual fishing debate. A long statement from the Prime Minister before the debate, and long speeches from those on the Front Bench meant that only one Opposition Back Bencher was called. She was not able to accede to my request, but I was encouraged when, in a reply to the hon. Member for Scarborough and Whitby (Mr. Quinn) about the Sea Fishing Grants (Charges) Bill, she said that it would offer an opportunity to discuss fishing issues.
The Bill was debated yesterday and I prepared a speech dealing with the problems of the British fishing industry, which is in a serious and desperate state. However, I was horrified when, at the beginning of the Second Reading debate, the occupant of the Chair indicated that it was a purely technical Bill and that he would not allow a general debate on fishing issues. Clearly, I agree that it might have been unwitting, but the right hon. Lady misled the House. I ask her to apologise for that and to make amends by offering a full day's debate on fishing, so that the vast majority of Members representing fishing communities have the chance to debate an industry that is in crisis and to speak for their fishermen.

Mrs. Beckett: I say this with respect, but I do not take lightly the use of the words "misled" or "apologise". I hope that the hon. Gentleman will recognise that, at least in my view, those remarks were disproportionate. Of course, I accept the concern that he has expressed and I regret the circumstances in which he found himself. He will know that I do not speak for, and cannot bind, the Chair, so I regret that he did not have the opportunity that he expected.
Equally, I regret that it has not been possible to find time for a debate on fishing. However, the hon. Gentleman will know that we might have had more time on the Bill yesterday had not time been taken up on other matters. That was perfectly proper. However, I repeat what I said to the right hon. Member for North-West Hampshire (Sir G. Young) at the outset. I understand the concerns, and that is why the Government, through Westminster Hall, have provided opportunities for 200 extra debates. I understand the great desire in the House to discuss all manner of issues, but that means that we have to use our time wisely. The Government must give priority to legislation, and Conservative Members might like to bear that point in mind.

Mr. Patrick McLoughlin: Will the Leader of the House find time for a debate on the important role that home helps play for vulnerable people? Is she aware that a dispute in Derbyshire means that many home helps have had their low wages reduced by 15 per cent? Will she use her efforts in the House and

as a Member representing a Derbyshire constituency—although I accept that she is not on the county council—to see that this unfortunate dispute is brought to an end?

Mrs. Beckett: I do not exercise powers over social services authorities. I always regret it when disputes arise and hope that they can be speedily resolved. I fear that I cannot undertake to find time for a debate in the House on this matter.

Sir Patrick Cormack: The right hon. Lady always treats the House with great courtesy, but this afternoon she has repeatedly been unable to give clear answers to questions because she has given the House legislative indigestion. In response to the initial questions of my right hon. Friend the Member for North-West Hampshire (Sir G. Young), will she tell us whether it is her intention, as she has suggested in the past, to give us a debate on the Wakeham report, for which the hon. Member for Cannock Chase (Dr. Wright) has also asked? Is it her intention to give us a debate on the intergovernmental conference White Paper and will we have a statement on the Crow report, which touches on the consistencies of many Members on both sides of the House? Can we please have a clear affirmation on those three points?

Mrs. Beckett: I am grateful to the hon. Gentleman for his kind remarks. I think that I have given the House a very clear steer indeed. I said nothing to the right hon. Member for North-West Hampshire that suggested that the Government were not perfectly prepared to have a debate on the Wakeham report. I am very mindful of the pressure from Conservative Members for a debate on the IGC report, but the hon. Gentleman will be aware of the number of occasions in recent weeks in which the Government have allowed one or two days for business and, because of the perfectly proper activities of Conservative Members, that business has not been concluded within the expected time. That has been a repeated pattern.
The Government have every intention of seeking to find time for some of the issues that he has raised, and for others that Members have perfectly properly mentioned, but there is a creative tension between these things, and the Government's priority is their legislative programme. Hon. Members who wish to debate other matters might like to have that in mind.

Madam Speaker: We shall now take the first statement.

Mr. Eric Forth: On a point of order—

Madam Speaker: Order. Points of order always come after statements.

Senator Pinochet

The Secretary of State for the Home Department (Mr. Jack Straw): With permission, Madam Speaker, I should like to make a statement about the case of Senator Pinochet, former Head of State of Chile.
This morning, I informed the House by written answer that I had discharged Senator Pinochet from the Spanish extradition request, on the grounds that he was unfit to stand trial and that no significant improvement in his condition could be expected. I also reported my decision not to issue an authority to proceed in the competing extradition requests from Belgium, France and Switzerland, because none of those disclosed an extradition crime. A detailed explanation of my reasons is included in my answer.
The House will also now be aware, from the written answer given earlier today by my hon. and learned Friend the Solicitor-General, that the Director of Public Prosecutions has decided, on the material available to him, that there is no realistic prospect of a conviction in this jurisdiction, and that in any event, in the light of the medical condition of Senator Pinochet, no court here would allow a trial to take place. My hon. and learned Friend will be making a statement to the House immediately after mine.
Senator Pinochet departed from his bail address at Wentworth, Surrey this morning. He was driven under police escort to RAF Waddington in Lincolnshire. A plane provided by the Chilean Government and carrying Senator Pinochet took off at about 1.10 this afternoon. The senator has now left the jurisdiction of the United Kingdom.
Let me now give the House a full account of what has happened in this case, as I said I would once the proceedings were concluded. I begin by making some general observations. My role under the Extradition Act 1989 is a quasi-judicial one. Although not generally incorporated into our domestic law, both the European extradition convention and the United Nations torture convention place important obligations on the United Kingdom, but I have to discharge those obligations within the powers and responsibilities placed upon me by United Kingdom law.
All the decisions which I have taken have been mine alone, and have not been decisions of Her Majesty's Government. Throughout, I have been keenly aware of the gravity of the crimes allegedly committed by Senator Pinochet and of the desire for justice by those who suffered at the hands of the former Chilean regime.
This has been an unprecedented case. Both I and the courts have had to navigate in uncharted territory. Two judicial Committees of the House of Lords took different views about what offences constituted extradition crimes. More recently, Mr. Justice Maurice Kay ruled that my refusal of Belgium's request for disclosure of the medical report which I had commissioned was correct. Shortly afterwards, a full divisional court, while acknowledging strong arguments on both sides, came to the opposite view.
The following is the chronology of the significant events. Senator Pinochet landed at Heathrow airport on 22 September 1998, for a private visit to the United Kingdom. On 16 October, the Metropolitan police

received an extradition request from a Madrid court for the provisional arrest of Senator Pinochet for serious offences, including the murder of Spanish citizens. The police were advised by officials of the Foreign and Commonwealth Office that Senator Pinochet did not enjoy diplomatic immunity from arrest. Bow Street magistrates court then issued a provisional arrest warrant, and Senator Pinochet was arrested that evening.
Senator Pinochet's solicitors made representations to me on 21 October 1998, asking me to cancel the provisional arrest warrant. I declined to do so, on the basis that the issues raised at that stage were a matter for the court. Senator Pinochet's solicitors challenged my decision. A divisional court, headed by the Lord Chief Justice, rejected that challenge and awarded me my costs. The court nevertheless quashed the warrant on the grounds that Senator Pinochet did have sovereign immunity as a former Head of State and that the warrant did not disclose an extradition crime.
The Crown Prosecution Service, acting on behalf of Spain, then entered an appeal to the House of Lords. In a unique feature of the case, the issue was considered twice by the House of Lords, first in November 1998 and then, after the first judgment was vacated, in March 1999. The key majority finding of the second court was that torture was an international crime over which the parties to the torture convention had universal jurisdiction, and that a former Head of State did not have immunity from such crimes. That ruling was a landmark judgment in human rights law, whose impact has been felt far beyond our shores. It will be a permanent legacy of the Pinochet case.
The second House of Lords judgment restricted the scope and number of the alleged crimes in respect of which Senator Pinochet could be extradited for torture and conspiracy to torture committed in Chile after the UK'S ratification of the torture convention in December 1988. The charges were, of course, still extremely serious.
I issued a second authority to proceed on 14 April 1999, giving my reasons. A second judicial challenge to my decision was made by Senator Pinochet's representatives, but was again rejected by the divisional court. On 8 October 1999, Senator Pinochet was committed by the Bow Street magistrate to await my decision on whether to extradite him to Spain. Senator Pinochet's solicitors applied for habeas corpus, and a hearing date was set for 20 March this year.
On 14 October 1999, I received representations from the Chilean embassy, supported by medical reports which suggested that there had been a recent and significant deterioration in Senator Pinochet's health. I commissioned a medical examination of Senator Pinochet by a team of independent practitioners of outstanding national and international reputation in their fields. The team consisted of Professor Sir John Grimley Evans, Professor Andrew Lees and Dr. Michael Denham. On the team's advice, Dr. Maria Wyke, a consultant neuropsychologist, was also brought in.
I want to put on record my gratitude to Sir John Grimley Evans and his team for their assistance. They have performed a very significant public service. They have not been able to speak freely in explaining and, where necessary, defending their findings, despite widespread public scrutiny.
The clinicians were instructed to undertake an examination and to provide me with a fully comprehensive report on the state of Senator Pinochet's


health. In particular, they were asked to advise whether any aspects of Senator Pinochet's health suggested that he was not then fit, or was likely to become fit, to stand trial in Spain. They were told that I was particularly interested in Senator Pinochet's ability to follow a line of questioning, to recall events—some of which took place as long ago as the 1970s—and to give coherent evidence. They were also asked to advise me on whether Senator Pinochet could be feigning any of his symptoms.
As I disclosed in my statement on 12 January, the conclusions of the medical report, applying the tests that I had outlined, indicated that Senator Pinochet was unfit to stand trial and that no significant improvements in that position could be expected. The Government's chief medical officer, Professor Liam Donaldson, confirmed the quality and thoroughness of the report. I am placing a copy in the Library of the House.
I informed the interested parties on 11 January that, in the light of the medical evidence and subject to any representations received by 18 January, I was minded to conclude that no purpose would be served by continuing the Spanish extradition request.
On 25 January, a judicial review application was made by Belgium and Amnesty International for disclosure of the medical report. In inviting Senator Pinochet to undertake the medical examination, officials had, on my behalf, given an undertaking of confidentiality. I indicated to the divisional court that although I would have preferred to disclose the medical report to the requesting states, I considered myself bound by the undertakings that I had given, subject to any overriding public interest.
Mr. Justice Maurice Kay held that the report should not be disclosed, but a full divisional court, in a judgment of 15 February, said that while the issue had been a very difficult one, the need for transparency to the requesting states in this exceptional case outweighed any duty of confidentiality. It said, however, that I should disclose the report to Spain, Belgium, France and Switzerland only in terms of strict confidence. I complied with the judgment. I regret to say that the content of that report was almost immediately leaked to the press.
Requesting states were invited to make any representation on the medical report by Tuesday 22 February. The representations included opinions from medical practitioners questioning the conclusions of the report. I asked Professor Sir John Grimley Evans and his team to review those medical opinions, and received their advice on 27 February. The team's advice was also reviewed on 28 February by the Government's chief medical officer, Professor Liam Donaldson. He commented:
I was very impressed with the care with which Sir John (and his team) has responded to each of the points of criticism of their report. This is not a crude rebuttal—it is a sound and logical reply supported by clinical evidence. I believe it is a further reflection of the skill, integrity and independence with which this task has been carried out by the clinicians.
I considered the matter afresh in the light of all the material. Having done so, I was satisfied that the conclusion of the original report was correct. I intend to place the medical representations and the team's response in the Library once I have secured the agreement of the requesting states.
The principle that an accused person should be mentally capable of following the proceedings, instructing lawyers and giving coherent evidence is fundamental to the idea of a fair trial. The trial of an accused in the condition diagnosed in Senator Pinochet, on the charges that have been made against him in this case, could not be fair in any country, and would violate article 6 of the European convention on human rights in those countries that are party to it.
A number of the representations that I received argued that even if there were questions about Senator Pinochet's fitness for trial, those should be determined in Spain and not here. I looked at that matter with great care. However, I was advised, and I concluded, that on the basis of English law I was bound to form a view of my own on Senator Pinochet's fitness to stand trial and that I could not refrain from reaching such a view on the basis that the question could be determined in Spain.
In any event, I established, with the assistance of the Spanish authorities, that Spain's principles for determining the fitness of an accused to stand trial are similar to ours. I therefore concluded that given the advice that no improvement in Senator Pinochet's condition could be expected, no judicial purpose would be served by the continuation of extradition proceedings for the objective of a trial in Spain which could not result in any verdict on the charges against him.
Of the 70,000 letters and e-mails from the public which I have received from all over the world, and many letters from Members of Parliament and organisations, almost all have urged me to allow the extradition proceedings to take their course, so that the allegations made against Senator Pinochet could be tried. I attach great importance to the principle that universal jurisdiction against persons charged with international crimes should be effective.
I am all too well aware that the practical consequence of refusing to extradite Senator Pinochet to Spain is that he will probably not be tried anywhere. I am very conscious of the sense of injury that is bound to be felt by those who suffered from breaches of human rights in Chile in the past, as well as their relatives.
All of these are matters of great concern, and I had them very much in mind when considering the evidence about Senator Pinochet's state of health. They have been among the reasons why I required the evidence of Senator Pinochet's medical condition to satisfy a high standard of expertise, thoroughness, objectivity and cogency before I was prepared to act on it. Ultimately, however, I was driven to the conclusion that a trial of the charges against Senator Pinochet, however desirable, was simply no longer possible.
The case has taken 17 months, much of that in court proceedings. While the House of Lords hearings on state immunity were indeed an exceptional feature, that period is not an unusual one in a complex, contested extradition matter. The Extradition Act 1989 is now more than a decade old and I believe that the time has come to review it. Work on that was in fact already under way before the Pinochet case began, and I intend to publish a consultation paper in due course on the options for streamlining our extradition procedures.
As I have already made clear, this case is unprecedented. Throughout the process, I have sought to exercise my responsibilities in a fair and rational way in accordance with the law. The case has understandably


aroused great debate and feeling. Its impact has been felt worldwide. It has established, beyond question, the principle that those who commit human rights abuses in one country cannot assume that they are safe elsewhere. That will be the lasting legacy of this case.

Miss Ann Widdecombe: I thank the Secretary of State for his statement and for his customary courtesy in giving me early sight of it.
I am sure that I speak for many when I welcome the fact that we have a final decision in the case, which has mainly been characterised by muddle, contradiction and delay. I also welcome the fact that there will be a review of the law of extradition, as it is clear that the case has pointed up several unsatisfactory aspects. I look forward to the consultation paper being issued in due course.
Will the right hon. Gentleman please publish an estimate of the full costs from the beginning to the end of the case? Will he also please publish an estimate of the police manpower involved in the case?
Will the Home Secretary explain the delays, particularly the two delays that occurred between October and March? The right hon. Gentleman was informed in October that there was a medical question mark over Senator Pinochet's fitness to stand trial, yet the procedures were dragged out until March before we finally had a decision. I ask the same question in respect of the application for habeas corpus, which was made in October and had not been determined by the time that everything else was resolved.
Does the Secretary of State accept that there are serious lessons to be learned from the case? It remains the fact that Senator Pinochet came to this country for medical treatment and, at the behest of our ethical Foreign Office, was greeted and feted at Heathrow—yet hardly any time later, he was arrested while still recovering from the operation for which he had come to this country.
The senator and those arguing on the other side of the case were subjected to a highly protracted legal process in which the Secretary of State appears to have been unable swiftly to determine the various matters that were his responsibility, rather than the responsibility of the court. He had the power to refuse the extradition application, but above all he had the power to act much more quickly when he knew that there was a question mark over the senator's health. It is that delay, rather than the original delay, which concerns me most.
The Secretary of State glossed over the leak of the medical report; he mentioned it, but he glossed over what was behind it. It remains a feature of the case that the Home Secretary gave an undertaking of medical confidentiality on the basis of which, presumably, permission to make the medical examination was granted. That confidentiality was then breached. What investigation has he made of that? What representations has he made to Spain, if that is where the breach occurred? How seriously does he take the matter? He is shaking his head, but I am not asking him to provide an explanation by magic; I am asking him what attempts he has made to find one. That is a reasonable question.
Senator Pinochet has been returned to Chile, and many of us will welcome that because we believe that Chile should have determined whether the case came to trial, and held that trial if it so determined. The outcome is satisfactory, but the case was deeply unsatisfactory. At the

end of the procedures, I cannot believe that Spain, Chile, the senator or the relatives and victims of his alleged crimes are happy. I cannot believe that anyone has gained satisfaction from the handling of the case. When reviewing the workings of our extradition law, will the Home Secretary also review the points on which he had absolute discretion, but took a long time to exercise it?

Mr. Straw: The right hon. Lady asked me specific questions, which I shall try to answer, and made some general observations with which I shall also deal. Our current provisional estimate of the Government's legal costs is just under £1.4 million, although they are likely to be greater. I cannot provide an estimate of the cost of the police protection. I may be able to do so with one important proviso: that I am satisfied that that will not compromise such security operations in future. That has been the policy of successive Governments. Subject to that, I will provide the information to the House and the right hon. Lady.
The right hon. Lady asked about the delay. No unreasonable delay occurred from the point in early October when I was informed by the Chilean Government—not Senator Pinochet's representatives—of anxieties about his medical condition. It is very unusual in an extradition case for medical representations to be submitted by a third party, in this case the Chilean Government. We had to ensure that my actions were in accordance with the law. At that stage, the matter was before the courts, not before me. In normal circumstances, it would have been appropriate for the habeas corpus proceedings to be completed before further representations were considered by the Home Secretary.
In the light of the serious condition which was disclosed prima facie by the medical report from the Chilean embassy, I was satisfied that it was right and proper of me to seek further independent medical opinions about Senator Pinochet's condition. However, first, I had to assemble a team whose expertise and independence was beyond question. That was put in hand with the greatest possible speed, but it took the chief medical officer, the Home Office and me some time to assemble such a team. We had to check that its members had the relevant expertise, no connections with Spain or Chile, and no political affiliations that would later bring their integrity into question.
The right hon. Lady asked an eccentric question about the delay in the habeas corpus application. She should know that as we have separation of powers in this country, the timing of cases is a matter for the courts, not the Home Secretary. I reject her suggestion that I have acted without speed at any stage in the process. Whenever a decision has been ready for me to make, I have acted with speed.
The right hon. Lady asked about the leak of the medical reports. I greatly regret that leak. I offered medical confidentiality partly because I was concerned that if it was not provided—the information was given only to the senator's representatives, the Crown Prosecution Service and to me—there would be a danger that it would not simply be confined to those who had an interest in it, but broadcast worldwide.
I fully accepted that, in terms of seeking publicly to justify the conclusions I reached, it was easier for me to have that medical report on the record. I made it clear to the divisional court that I felt myself bound by the


undertakings of medical confidentiality, which I had given in good faith, but of course if the court ordered otherwise I would have to follow the decision of the court. That is what I did—[Interruption.] That is precisely what I did. We do not know exactly where it was leaked, but there is every suggestion that it was leaked outside this jurisdiction. Inquiries are being made. I understand from the Spanish ambassador that Spain regrets the leak, but has been unable to conclude that it was the fault of the Spanish authorities.
I want to make two final points. I have dealt with the allegation that the right hon. Lady made about delay. She then suggested that there has been muddle and contradiction in this case. Looking at the Opposition's response, only they have shown the most extraordinary muddle and contradiction in the pursuit of this matter. This morning on the radio she said, commendably, that she had never suggested for one moment that anything I had done was improper. She also suggested that once the matter had been before me it was appropriate for me to make decisions. That is a rather different comment from past ones that I have had to accept without the possibility of responding.
The right hon. Lady told the Conservative party conference—I suspect more for its entertainment than as a recitation of the truth—that I had welcomed General Pinochet to the United Kingdom, when I had done absolutely nothing of the kind, and that I had arrested him, which I had also not done. There is also the comment of the Leader of the Opposition on 10 December 1998, who described my decision to issue the first authority to proceed as "cowardly". I do not happen to believe that accepting and acknowledging our international obligations and the rule of law is a matter of cowardice. Given the position that she is now taking, I hope that she will invite her right hon. Friend to withdraw such an unsubstantiated remark.
My final point is that I am sorry that the right hon. Lady did not see fit to acknowledge the very serious nature of the crimes alleged against Senator Pinochet. He was accused of torture and of conspiracy to torture of a very extreme kind. Those were and remain crimes that should have been the subject of international judicial process, but for the fact that this man was unfit to stand trial.

Mr. Jeremy Corbyn: Does the Home Secretary accept that many people in this country and around the world feel a sense of shame at the news that Pinochet has now left British airspace and is therefore free from any likelihood of prosecution in any court anywhere in the world? Does he also accept that in addition to the 31 cases of torture on which Pinochet stands indicted in British courts, he stands accused of the death or disappearance of more than 7,000 people in Chile? This man has not faced justice; he has avoided it. He has lived in luxury and gone through the courts here. None of his victims ever had the chance to go through courts or be represented anywhere. They were merely shot and murdered during his disgraceful regime.
Can the Home Secretary explain why, on 5 November 1999, he wrote to Pinochet's lawyers offering medical confidentiality in return for Pinochet undertaking a medical examination? Subsequent to the divisional court's decision to overturn the January decision of a court,

Belgium, France and Spain all requested further medical examinations of Pinochet. Pinochet refused to be examined again and subsequently the Home Secretary has allowed him to leave this country.
Many people and many eminent doctors believe that Pinochet is capable of comprehending a case against him and is therefore capable of standing trial. Can the Home Secretary therefore explain why this situation has been allowed to develop? Would he be prepared to meet the families of the victims of torture and of people who have disappeared to explain to them personally why he thinks that that is the correct decision to take, when none of their relatives had any opportunity for any justice whatever during the reign of terror in Chile?

Mr. Straw: On my hon. Friend's last point, of course I would be happy to arrange a meeting with the families whom he speaks about to explain the decision that I came to, but I have to say that I reject a great deal of the rest of what he said. In the light of the medical evidence that I had before me, there was no case whatever for a further medical examination.
The situation was this. First, the Chilean embassy had arranged a medical examination of Senator Pinochet by people who were eminently qualified in their own field. Notwithstanding that, because the examination was by someone effectively appointed on the side of Senator Pinochet, I was not remotely willing to accept that advice as conclusive, even though it indicated that there had been a very significant deterioration in his health in the autumn of last year—so the panel was then appointed. Clear tests were set for the panel, but the decision about Senator Pinochet's unfitness to stand trial was mine, not its.
I asked the panel to offer advice on the basis of tests that I had set, but I then sought the further advice of the Government's most senior medical officer, Professor Liam Donaldson, on those reports. On 7 January, he wrote to me to say:
This authoritative medical report leaves me no reason to doubt the specialists' judgement that the Senator is not fit to stand trial and that his present condition is not one which would be expected to improve. The report also makes clear that the Senator's condition could not be feigned.
He repeated that conclusion when he commented on the further reports that I received very recently.
I have already explained why I offered medical confidentiality in this case. I believe that I was right to do so, notwithstanding the fact that I was always aware that it would be more difficult publicly to justify my conclusions on the basis of my simply reporting them, than if the report were made public in a worldwide sense.
My hon. Friend asked, would not the decision be greeted with shame? I do not believe that it will be greeted—or should be greeted—with shame. I hope that it is greeted with a recognition that, throughout the case, I have sought to follow the rule of law. That rule of law requires that those accused of very serious crimes, wherever those crimes are alleged to have happened, should be brought to justice. It also requires that there are some basic conditions relating to the medical and physical fitness of any accused before they can stand trial.
I have sought not only to be consistent within the case, but to be consistent between the case and other extradition cases with which I have dealt. I remind my hon. Friend that in the case of Roisin McAliskey—which was not the


same, but where similar issues of her medical condition arose—I decided, again on the basis of independent medical evidence, not to order her extradition. I do not recall that he accused me of shameful conduct in that case; rather, what I remember is that he thanked me for the decision. We have to judge these issues on matters of principle, not according to the person concerned.

Mr. Simon Hughes: While I share the disappointment of millions, probably, that Senator Pinochet has gone back to Chile, where he will probably never be prosecuted, I also share the Home's Secretary view that it is quite wrong to say that he or others have acted wrongly to delay the proceedings in this country. Anyone who knows anything about extradition law knows that there are legal proceedings and political proceedings and that they are bound to take a length of time if they are to be properly handled. I have been critical of some of the decisions along the way, but delay and confusion is not an allegation that comes properly from the Conservative Benches or elsewhere when discussing how the Home Secretary has dealt with the matter.
I want to ask the Home Secretary about two things, as well as welcoming his response to the hon. Member for Islington, North (Mr. Corbyn), in which he said that he would meet victims and relatives of victims. Many of us have constituents who would appreciate the ability to discuss the implications of the decision today.
First, given that the two controversial matters were the medical evidence and the fitness to plead, and given that the Home Secretary is to review extradition law, will he take the assessment of who is a medical expert, how a judgment is reached on medical evidence and how a conclusion is drawn about unfitness to plead away from politicians and establish a process that is agreed between parties in advance and covers a variety of cases and, ideally, is agreed internationally?
Secondly, given that I share the Home Secretary's hope that the case is remembered for the fact that it established that dictators and political leaders cannot hide from the consequences of actions taken against their citizens, can he reassure me that it will be not just a theory, but a practice, that the international convention will not allow many countries to escape and that everyone will sign up to it? The sooner we get the International Criminal Court in place and in action so that such matters can be decided by international judges, the sooner we will be seen to have a fair international judicial system for dealing with terrible tyrants, as Senator Pinochet apparently was.

Mr. Straw: I am grateful to the hon. Gentleman. I understand the disappointment felt by relatives of the victims of what happened in Chile and also by the victims that are still alive. Had it not been for the senator's patent unfitness to stand trial, subject to any conclusions of habeas corpus and court proceedings, he would have stood to be extradited to Spain. That was the clear implication of decisions that I took earlier in the case to issue authorities to proceed.
The hon. Gentleman asked two questions about our review of extradition law. First, he asked whether it was possible to establish a protocol for the assessment of the medical conditions of those who are accused. We shall certainly think about that. Ultimately, decisions on such

matters will have to be made by a court or by the Secretary of State. There is a nice issue as to where the balance lies. I do not believe that such decisions can be entirely handed over to the courts, but judgments as to how the issue should be streamlined need to be considered carefully.
Secondly, we are strongly committed to ensuring that we, as a country, uphold international law. We have sought to prove that in practice even more recently than the issue of the arrest warrant for Senator Pinochet. As the hon. Gentleman knows, we shall introduce legislation as soon as possible to bring the International Court of Justice into our law.

Mr. Denis MacShane: I accept my right hon. Friend's decision—I do not think that "welcome" is the appropriate verb—but does he agree that Pinochet has already been judged at the bar of world opinion and that his crimes of torture and murder will ring through history? Are there not three conclusions to be drawn from this issue? First, dictators and tyrants do not escape justice, arrest and detention. Secondly, we have seen exposed, more by the antics of those in another place—an organisation that is loosely called "Tories for Torture"—the extraordinary behaviour of Conservative Members who have sought to justify crimes committed by one of their ideological bedmates and their double standards.
Thirdly and most importantly, is it not the case that Pinochet returns-to Chile a broken and humiliated man? His spell over Chile has been broken and the people of Chile have elected a socialist president—the best way of commemorating Salvador Allende's term of office. Although Pinochet may have escaped trial, his crimes will for ever be remembered as some of the most heinous and he was in this country when the world remembered the great evil that he did.

Mr. Straw: My hon. Friend is entirely right to draw attention to the extravagant and wholly ill-judged opinions that have been expressed about the consequences of the case. Although it was not a factor that I ever took into account, it was suggested—it was in the public print—that, if the proceedings against the senator continued for any period at all, and still more if he were extradited, it could lead to a return of dictatorial government in Chile. There is no evidence to suggest that consequence, but there is overwhelming evidence that not only in Chile, but across Latin America, the extradition process within the context of the British rule of law has assisted people in Chile and elsewhere in Latin America in coming to terms with a non-democratic past. That may be one of the legacies of this case.

Mr. Peter Brooke: In the aftermath of the Home Secretary's decision, and of Senator Pinochet leaving our jurisdiction, would the Home Secretary be prepared to revisit another ancillary issue of public order about which I have remained silent for 17 months, until the main case was determined? I am referring to the continuous and noisy demonstration outside the London Clinic, for nearly a fortnight, in October 1998.
I raise the issue on two counts. The first is that there were people dying in the hospital and that their nearest and dearest were visiting them. Secondly, there is no question but that the people staffing the hospital were


genuinely in fear, especially after an international television cameraman was apprehended on the very floor on which General Pinochet was situated. Does the Home Secretary think that demonstrations outside hospitals are an issue that we should revisit for the future?

Mr. Straw: I fully understand the right hon. Gentleman's concern in the matter. As he will know, similar concerns were expressed to me by Lord Biffen on behalf of the hospital. I also know that very great inconvenience was caused to patients in the London Clinic. I shall certainly take it up with the Commissioner of Police of the Metropolis, and I shall write to the right hon. Gentleman.

Mr. Ted Rowlands: May I just mention to my right hon. Friend that, as a Minister of State in the Foreign Office for four and a half years between 1975 and 1979, I heard testimonies repeated by family after family about the torture and disappearance of many of those who were lost? Tens of thousands of people were affected by the Pinochet regime. May I also remind my right hon. Friend and the shadow Home Secretary that that included the torture of a British citizen, Sheila Cassidy? Although I am willing to accept the decision that my right hon. Friend has had to make, I think that we should at least remind everyone that Pinochet received our judicial process in a fair way and had a fair hearing—which he denied tens of thousands of his own citizens.

Mr. Straw: I think that my hon. Friend's point is very well taken. He knows from his earlier experience of the very serious problems that affected the people of Chile in the period following the assassination of President Allende.

Mr. John Wilkinson: Is it not worth reminding the House that in December 1997, when the Labour Government were in power, the senator came to the United Kingdom as a VIP guest, when he was commander-in-chief of the Chilean army? The VIP reception that he received when he came in December 1998, at the behest of the Foreign Office, was essentially no different. Now, the important thing is to forget this sorry episode as soon as possible—the least said, the soonest mended.
May I also say how pleased I am that, in 10 days, the Minister of State, Foreign and Commonwealth Office, the hon. Member for Leeds, West (Mr. Battle), will go to Santiago for the inauguration of the new democratic Government under President Lagos? The Minister will find that Chile is a wholly democratic country which is under the rule of law that it has had ever since Pinochet voluntarily relinquished power.

Mr. Straw: I am very glad that my hon. Friend the Minister of State will attend the presidential inauguration, which I believe takes place on Thursday. It is right to say that the elections in Chile were democratic and fully representative.
Let me just deal with the myth about Senator Pinochet being welcomed as a VIP guest. My understanding is that when he came to this country he was provided with VIP

facilities at Heathrow, as is routine, and the Foreign and Commonwealth Office was aware of his visit. At that stage we had no knowledge that any extradition warrant was going to be issued in the Madrid court. It was not until I was on an aeroplane travelling to Avignon in France—to make a speech about the need to modernise extradition procedures, as it happens—that I was passed a copy of The Guardian, where I read a small item saying that Senator Pinochet was in the country and might be the subject of extradition proceedings, whereupon I suggested to my private secretary that we needed to find out something more about the matter.

Ann Clwyd: I feel that a great injustice has been done today to the thousands of people who disappeared or were tortured or murdered, as well as to their families, many of whom have spent night after night and month after month outside the House of Commons protesting about General Pinochet. It is a tragedy that this country, which has signed up to all the human rights conventions and the convention on torture—the list of conventions is as long as one's arm—allowed General Pinochet to come here without prosecuting him ourselves. Why did we wait for Spain to ask for his extradition? Why did we not do it ourselves? We are obliged under the torture convention to prosecute those who come here and are accused of heinous tortures in their own country.
When further medical evidence was requested, a further examination should have been possible. There appeared to be doubt. Those who appeared on behalf of Amnesty International thought that it was essential that a further examination should be carried out. Why was that not done?
My right hon. Friend has not explained satisfactorily why General Pinochet was given an assurance that his medical details would remain secret. As my right hon. Friend knows, it is possible to make such details available in the public interest. It should not have required other countries to make that request to the courts.
There are clearly weaknesses in English law that need to be rectified. What proposals does my right hon. Friend have to investigate those weaknesses and ensure that if someone similar, such as Saddam Hussein or any of the Iraqi war criminals, visited this—

Mr. Deputy Speaker (Mr. Michael Lord): Order. The hon. Lady has said enough for the Home Secretary to respond to.

Mr. Straw: Of course I understand the strong feelings involved, particularly those of victims and relatives affected in Chile. However, we cannot deal with such issues simply on the basis of emotion. If we did, there would be a great danger of falling into the trap of double standards—applying different principles to those of whom we approve from those that we apply to those of whom we disapprove. Many Conservative Members have fallen into that trap.
My hon. Friend talks about our being signed up to all the human rights conventions. It is precisely because we are signed up to human rights conventions, and we cannot pick and choose which articles of those conventions we apply, that I have had to come to my decision. The plain, unalterable and unanswerable fact is that Senator Pinochet's medical condition is such that to have


extradited him to Spain would have been a palpable breach of article 6 of the European convention on human rights, which guarantees the right to a fair trial.
The test of fitness to stand trial in Spain is in all material respects the same as the test to stand trial in the United Kingdom. Moreover, for reasons that I have explained, there is no question but that I could not have passed the responsibility for determining fitness to Spain. It was a decision that I had to make. If my hon. Friend had been in my position, faced with the same evidence and the duties imposed by all the international human rights conventions to which she refers, she would have had to come to the same conclusion as I did.

Several Hon. Members: rose—

Mr. Deputy Speaker: Order. Before I call the next hon. Member to put a question, I ask for much shorter questions and, if possible, shorter answers. There is another major statement to be made and we must protect the debate on Welsh affairs.

Mr. Gerald Howarth: I welcome the fact that Senator Pinochet, a true friend of the United Kingdom, has returned to his home country—which is the proper forum to hear the allegations made against him.
Does the Home Secretary accept that had he acted more decisively in October 1998, this thoroughly unsatisfactory and disgraceful fiasco might have been avoided? I have some sympathy with the right hon. Gentleman in his difficulties over judicial review. The House should hold him to account, not the judges of our country. Is it not unacceptable that the Home Secretary was obliged to extend the incarceration of Britain's only political prisoner at the behest of foreign Governments?
The Home Secretary was saying that, were it not for the fact that the senator was unfit to plead, he would have bowed to the request of a foreign Government. What implications will that have in future for visitors from China, Zimbabwe and other countries of whose practices we disapprove?

Mr. Straw: We may geographically be an island but judicially we are not. We have international obligations to other countries that go back centuries. Extradition is one of them. The procedures are over-complicated, as this case illustrated—but they are such that other states are able to request extradition of a fugitive from this country, and we are able to do likewise. International order, and order within each country, is enhanced by the availability of extradition.

Mr. David Winnick: The decision will undoubtedly be a bitter blow for all the people who suffered at the hands of the Pinochet regime, but I accept—as someone who campaigned for Pinochet to face justice—that it would be wrong for the senator to be placed in the dock if his health is as claimed by doctors. We shall soon see whether there is any recovery once he is in Chile.
Does my right hon. Friend agree that, in a country such as ours, governed by the rule of law and justice, it is absolutely nauseating that a former Prime Minister, Lady Thatcher, should act as the chief apologist of Pinochet

and minimise the tortures and mass murders that occurred under his regime? She has brought only disgrace upon her name and reputation.

Mr. Straw: I never thought that Lady Thatcher's comments were consistent with support for the international rule of law, but that is for her to explain.
One of the key questions put on my behalf to the medical team was whether there was any possibility that Senator Pinochet could have feigned his symptoms. We have to rely on the best medical evidence available and the conclusion of the doctors and of the chief medical officer was:
The senator's condition could not be feigned.
It is hugely important in such a case that there is no fabrication of symptoms. I am as satisfied as I conceivably could be that there was none in this instance.

Mr. Eric Forth: When the Home Secretary reviews the extradition processes, will he do his best to introduce a filter against mischievous, maverick and politically motivated interventions by other countries in our judicial process? The right hon. Gentleman indicated that that was a large part of the problem, and such a filter would be a benefit of his quite proper review. If the Home Secretary fails to do that, it is possible that this country may be visited by fewer and fewer Heads of State—past and current—because they are afraid of the same happening to them. That might not be a bad thing from some people's point of view, but if we want an increasing number of heads of state from Africa and the far east to visit, they might seek some reassurance that they will not go through the same thing as Senator Pinochet.

Mr. Straw: Sometimes I find the right hon. Gentleman's arguments difficult to follow. If he is arguing that former Heads of State against whom there are allegations about the commissioning of serious crimes should enjoy immunity wherever they travel, I do not take that view.
The right hon. Gentleman implies that Spain's extradition request was mischievous and maverick. I do not for a second take that view either. That request was proper and was found by the Judicial Committee of the House of Lords in its first decision to be proper in all material respects as to the charges. The second decision by the House of Lords in March 1999 reduced the number of extradition crimes, but the two sets remaining, of torture and conspiracy to torture, were among the most serious of which anybody could be accused—and were backed by clear evidence. It would have remained to be seen, had extradition and a trial taken place, what decision would be arrived at by an independent Spanish court. But in no sense do I criticise Spain for seeking extradition.

Ms Jenny Jones: My constituents include victims of Pinochet's brutal regime, and today they and I are required to swallow a very bitter pill. Can my right hon. Friend say where my constituents can turn now for the justice they ought to receive for the violations of their human rights?

Mr. Straw: I understand of course that for anybody who was in Chile and suffered at the hands of the Chilean


regime when Senator Pinochet was in power, or for their relatives, my decision is a bitter pill to swallow. Throughout this case, I have sought to make decisions in accordance with the law and our international obligations.
We in Europe accord to people suspected of crimes greater rights than those accorded by many dictators to their victims—some of whom are never given the chance of a fair trial before they are convicted and punished for their alleged crimes. An essential part of our rule of law—and something to which Chile is aspiring—is that while international obligations require us to pursue persons against whom serious criminal allegations have been made, they are provided with minimal safeguards. One of those safeguards is that such persons should be fit to stand trial.

Mr. Edward Leigh: I wonder whether the Home Secretary is sensing the temperature of the House? Both sides in this issue feel embittered and frustrated by the way matters have been handled. There is not just our view that this is an abuse of the ancient rule of hospitality against a guest of this country who showed us nothing but friendship in our hour of need. There is also the view of Government Back Benchers that the Home Secretary has used doctors to get him off a hook of his own making. As this episode unfolds, does not the right hon. Gentleman feel that he should have acted more decisively in October 1998—instead of clouding the whole issue in pseudo-legalisms and achieving nothing for this country or for Anglo-Chilean relations?

Mr. Straw: In my study of British extradition law over 17 months, I have never spotted even in a footnote that one of the considerations that I have to take into account is "the ancient rule of hospitality". That was not one of our considerations. I did act decisively in October 1998—I refused to quash the extradition warrant. The hon. Gentleman should have said that I made a decision with which he disagreed—that would have been the honest position to have adopted. Throughout this case, I have acted decisively. I have made decisions, whether yes or no, on the basis of the proposition before me. I have always been aware that whatever decision I would make would please some people and displease others.

Mr. Gareth Thomas: May I thank my right hon. Friend for explaining precisely how he arrived at what was obviously a finely balanced judgment? Does he agree that although many people will find it difficult to understand why it was not possible to see justice done in this case, we should not lose sight of the fact that this country facilitated the process whereby important principles of international law were established—first, that there should be universal jurisdiction for human rights abuses, and secondly, that Heads of State cannot automatically rely upon immunity? Does my right hon. Friend agree that important principles have been established none the less?

Mr. Straw: Yes, I entirely agree with my hon. Friend that the principle of universal jurisdiction in respect of very serious crimes such as torture is now established as, too, is the principle that former heads of state are not immune from a process for such alleged crimes. If the

approach of the then shadow Home Secretary had been followed, and I had simply quashed the original arrest warrant in October 1998, none of that experience would have followed.

Mr. Patrick Nicholls: There is something uniquely shabby, even by the standards of this Government, in laying on a reception for Senator Pinochet when he arrived in the country and then conniving at his arrest under a defective warrant. Does the Home Secretary realise that the rest of us understand that the reason he sought medical evidence, or acceded to that request, was not his concern about Senator Pinochet's human rights, but the dawning realisation of the nightmare that would descend upon him if Senator Pinochet died in our jurisdiction? Is not one of the conclusions that he can draw from today's exchanges in the House that any lingering reputation that he had for ministerial competence has quite gone?

Mr. Straw: I leave aside the hon. Gentleman's gratuitous insult. What he says is wrong from top to bottom. There was no conniving at the arrest. He fails to understand that there is a separation of powers here. The hospitality department of the Foreign and Commonwealth Office is not also a police department that executes warrants. [Interruption.] There should not be liaison between the hospitality department of the Foreign and Commonwealth Office and the police and prosecuting authorities in this country. If there were liaison, there would be most serious allegations of connivance—it could be alleged that we were conniving to ensure that a fugitive from justice should escape from justice again. The Conservative party claims to be the party of law, yet for 17 months Conservative Members have been inviting me to ignore the law in order in pursuit of their own political convenience.
As to the suggestion that this was a defective warrant, the warrant was not defective—it was found to be fully effective by the courts. On two occasions, not one, my decision in respect of those warrants was challenged by Senator Pinochet's lawyers, and on both occasions the court found in my favour.

Ms Glenda Jackson: It is not only shabby but entirely predictable that the Conservative party should continue to act as apologists for murderers and torturers. Did my right hon. Friend, upon the Spanish authorities receiving the medical evidence, receive notification from them of the withdrawal of their extradition order? Has the medical evidence been furnished to the Chilean authorities, whose ambassador to this country has upon more than one occasion stated that it is the aim of that Government to bring General Pinochet to justice? Should the general, as many of my constituents who suffered at his hands believe, undergo a miraculous improvement once returned to Chile, will the Government assist the Chilean Government in making every effort to ensure that at some point he stands before a court of law?

Mr. Straw: So far as I am aware, and I have taken this only from the television, the Spanish Government have indicated that they accept the decision that I have made in this case. There was some suggestion on the television


news that the judge in the case may have taken a different view, but that is my understanding. I also understand that a similar approach has been taken by Belgium.
The medical evidence has not formally been made available to Chile, because Chile has not been party to the proceedings in this case, nor is it another requesting state. As the reports will now be made available in the Library of the House of Commons and formally made public, there is no reason why they should not also be available to the Government of Chile.
It is not for me to speculate about the prognosis of Senator Pinochet's condition, except to say that the very clear and thorough medical evidence from an independent medical team supported by the chief medical offer was that Senator Pinochet's symptoms were not feigned and that they were not likely to improve.

Dr. Julian Lewis: Will the Home Secretary accept that, like him, I believe in the relentless pursuit of people accused of crimes against humanity? Will he also accept that, unlike him and many of his right hon. and hon. Friends, I do not believe in the application of double standards to that pursuit? Does he know that many of my family were killed by the Nazis in the 1940s? Can he explain why the Government, who were so keen to pursue General Pinochet, have consistently stonewalled my attempts to get them to make representations to the Government of Syria over the case of Aloïs Brunner, Eichmann's right-hand man, whom they are still sheltering?
Can the right hon. Gentleman explain why, when Konrad Kalejs, one of the very people who may have murdered the members of my family, was found to be in this country, he was not arrested, but bundled straight out of the country? I know that the researcher who was most qualified to advise the Home Secretary of the nature of Kalejs's crimes was not even contacted before the right hon. Gentleman kicked out this murderer, against whose crimes the crimes of Pinochet against leftists pale, if not into insignificance then into something far less horrible than what millions of victims suffered at the hands of the Nazis, whom the chattering classes evidently care so much less about.

Mr. Straw: Of course I understand the hon. Gentleman's very strong feelings when it comes to the holocaust. He knows that I, too, have personal reasons for understanding them. However, I wholly reject the argument about double standards. Indeed, my point to my hon. Friend the Member for Islington, North (Mr. Corbyn) was that it was precisely to avoid double standards that I sought to act as consistently as I could with regard to this

case and the case of Roisin McAliskey. Double standards would have arisen if I had acted in a completely contradictory way, which I suggest that in no sense have I done.
The hon. Gentleman referred to someone who was suspected of being a fugitive in Syria. It is the first time that the case has been made known to me. If the hon. Gentleman wishes to make representations to me, I am happy to see him and follow them up.
The hon. Gentleman's point about Mr. Kalejs makes my point about Secretaries of States and courts having to act according to the rule of law, both national and international. The simple fact, as everybody knows, was that no extradition warrant had been received in respect of Kalejs.

Dr. Lewis: Arrest him?

Mr. Straw: Although I am endowed with some powers, I do not have powers of arrest, except in very marginal circumstances relating to immigration offences when we wish people to leave the country and they refuse to do so. As Kalejs left voluntarily, there was no power whatever to detain the man. That is the truth of it. I had the matter examined with very great care. I do not know which researcher the hon. Gentleman is talking about, but we were in contact with a number of researchers, and I was in contact with representatives of the Jewish community.
Of course I understand the demand that if people are alleged to have committed serious crimes, however long ago that may have been and whatever the country, they should be brought to justice. I see it as part of my responsibility to ensure that that happens, but it has to happen within a framework of the rule of law.

Mr. Tam Dalyell: The Home Secretary is a candid and reflective person. With the huge benefit of hindsight, is there anything at any stage that he would have done differently?

Mr. Straw: I am grateful to my hon. Friend for that question. I have certain wishes, and have already expressed the thought that it would be in everyone's interest if the procedure for extradition were simplified both in high profile cases such as this one and in more routine cases. With the benefit of hindsight, I can say of the key decisions that I have taken—the original decision not to quash the extradition warrant, two successive authorities to proceed, the decision to ask for independent medical examination and the decision I have announced today—that I would not have taken any of them differently.

Senator Pinochet (CPS Role)

The Solicitor-General (Mr. Ross Cranston): With permission, Mr. Deputy Speaker, I should like to make a statement about the role of the Crown Prosecution Service in respect of Senator Pinochet.
Earlier today, the CPS, as prosecuting authority for England and Wales, advised the Metropolitan police service that the material provided by the Kingdom of Spain for the purposes of extradition proceedings would not be admissible in a criminal prosecution in England and Wales and could not be put into admissible form without a full police investigation. On the material available to the CPS, therefore, there is no realistic prospect in this jurisdiction of convicting Senator Pinochet of any criminal offence.
The CPS also advised the Metropolitan police service that, in view of the independent medical report on Senator Pinochet, commissioned by the Home Secretary, and in view of representations made to the Home Secretary concerning the report, no court in England and Wales would allow a trial of Senator Pinochet to take place, whatever the evidence. Following that advice, the MPS decided that no purpose would be served in seeking to effect an arrest of Senator Pinochet.
Those decisions were necessary because of article 7 of the United Nations convention against torture and other cruel, inhuman or degrading treatment or punishment. The convention provides that if a state does not extradite, it must consider whether to prosecute the person itself. Accordingly, following the Home Secretary's decision not to extradite Senator Pinochet to Spain, the Spanish extradition papers were submitted formally to the CPS as the independent prosecuting authority for England and Wales. The CPS in turn formally referred the papers to the MPS, which is responsible for investigating offences and deciding whether to arrest or charge people.
In fact, the papers had previously been supplied to the CPS and the police and had been carefully studied by them, so both the CPS and the police were in a position to announce their decisions today. However, before I say more about that, I should set out the involvement of the CPS in the case. The CPS had a role as agent for the Kingdom of Spain, which arose after Senator Pinochet's arrest on 16 October 1998, pursuant to a warrant issued by the fifth central magistrates court in Madrid. On 18 October 1998, the CPS commenced acting as agent on behalf of the Kingdom of Spain in the extradition proceedings, and it has continued to act for the Kingdom of Spain throughout the extradition process.
In its role as agent for the Kingdom of Spain, the CPS acted in accordance with the instructions of the requesting state, which is in accordance with long-standing reciprocal arrangements between this jurisdiction and other countries. In doing so, it has been quite independent of the Government. In performing its role as agent for the Kingdom of Spain, the CPS has given confidential legal advice on the extradition proceedings and received instructions.
Let me turn to the separate and distinct function of the CPS in this matter, which is the main focus of this statement. That function is its role as the independent prosecuting authority for England and Wales, and its

involvement in that regard arose in two ways. First, in October 1998 two firms of solicitors, acting for a number of individuals, applied to the then Attorney-General, my right hon. and learned Friend the Member for Aberavon (Sir J. Morris), for consent to prosecute Senator Pinochet in this jurisdiction for offences of torture, contrary to section 134 of the Criminal Justice Act 1988, and for offences of hostage taking, contrary to the Taking of Hostages Act 1982.
The papers in one of these applications were also copied by the solicitors to the MPS, which in turn sought the advice of the CPS as prosecuting authority. In those circumstances, my right hon. and learned Friend deemed it appropriate to liaise with the CPS before reaching a final conclusion on the applications for Law Officer consent to prosecute. The Attorney-General also received advice from senior Treasury counsel. Subsequently, he advised the solicitors that decisions on whether or not to grant Law Officer consent to prosecute are made by applying the tests set out in the code for Crown prosecutors, and that the legislation criminalising torture and hostage taking is not retrospective—a point later confirmed by a decision of the Appellate Committee of the House of Lords. He also advised that the material submitted in support of the applications contained insufficient admissible evidence against Senator Pinochet to justify the granting of Law Officer consent to prosecute for either offence. Consent to prosecute was, accordingly, refused.
I should add that a third firm of solicitors, acting for a number of Chileans, applied last week for my consent to prosecute Senator Pinochet for offences of torture. That application has been carefully considered and the advice of counsel was obtained. Again, the code of Crown prosecutors was applied to the decision-making process. The first requirement of the code is that there should be sufficient admissible evidence for a realistic prospect of conviction before a prosecution may follow. The application contained no evidence of a kind admissible in this jurisdiction, and I accordingly declined to grant my consent.
The second function of the CPS as prosecuting authority has been to consider the case for prosecution of Senator Pinochet in this jurisdiction under article 7 of the UN convention against torture and other cruel, inhuman or degrading treatment or punishment. The CPS and police recognised that article 7 might come into operation in respect of the Spanish extradition papers. To prepare for that contingency, the CPS obtained copies of all the relevant Spanish extradition papers in March and April 1999 in its capacity as the prosecuting authority for England and Wales. The MPS, as investigating authority, was also supplied with a copy of those papers. All that was done with the agreement of the Kingdom of Spain and the Home Office.
The Spanish extradition papers were allocated to lawyers in the CPS separate from those acting for the Kingdom of Spain. The provisional conclusion of the CPS was that the material provided by the Kingdom of Spain for the purposes of the extradition proceedings would not be admissible in a criminal prosecution in England and Wales, and that the material could not be made admissible without a full police investigation. The CPS advised the police along those lines. Whether or not the MPS institutes a full investigation in this or any other case is a matter for it to decide.
It may help the House to understand the provisional CPS conclusion if I explain that in European extradition proceedings it is not necessary to bring evidence before a court to show that a person has committed the offences of which he or she is accused. All that is necessary is that the court here must be satisfied that the allegations amount to an extradition crime and that the formal request complies with the requirements of the Extradition Act 1989 and the European convention on extradition of 1959. That explains why the CPS reached its provisional conclusion that, in the absence of a full investigation by the police, there was no admissible evidence for the purpose of a prosecution here.
In addition to those evidential considerations, the CPS—again in its role as independent prosecuting authority—received, in January, and with the consent of Senator Pinochet, a copy of the medical report prepared by the independent experts commissioned by the Home Secretary. The CPS has also seen representations made to the Home Secretary concerning that report.
The report and subsequent advice make it clear that Senator Pinochet's ill health is such that he would not be able to defend himself properly in any criminal prosecution brought in this country. The provisional CPS conclusion in the light of the material was that no court in England and Wales would allow a trial of Senator Pinochet to take place because of his ill health, whatever the evidence. Again, the CPS advised the police of that.
In reaching its provisional conclusions, the CPS consulted me and I agreed with them, after taking the best independent legal advice available. My right hon., noble and learned Friend the Attorney-General has not involved himself as a Law Officer in this case. He and I agreed that his previous patronage of Redress, from which he resigned on taking ministerial office in May 1997, meant that it would be more appropriate if I handled the case. The solicitors acting for Senator Pinochet were advised of that in September last year.
Following today's formal submission of the Spanish extradition papers to the CPS under article 7, the CPS has confirmed its provisional conclusions. First, the material in the possession of the CPS would not be admissible in any criminal prosecution in England and Wales, and could not provide a realistic prospect of conviction. Secondly, an investigation for which the police are responsible would be required to gather evidence admissible in this jurisdiction. Thirdly, whatever the evidence that might be available, no court in England and Wales would allow a trial of Senator Pinochet to take place in view of his ill health. I agree with those conclusions.
Accordingly, the CPS did not apply for my consent, in respect of the Spanish extradition material, to prosecute Senator Pinochet for torture. The Metropolitan police service and Senator Pinochet's lawyers were advised of the CPS's conclusions. The MPS, which has taken its own legal advice, decided not to arrest Senator Pinochet earlier today.
The House will also be aware that on 11 and 13 November and on 15 December 1998 my right hon. Friend the Home Secretary received requests for the extradition of Senator Pinochet from Switzerland, France and Belgium. Further requests were received from France on 4 February last year and from the Kingdom of Belgium on 12 October last year.
On 9 December 1998, my right hon. Friend decided not to issue an authority to proceed with regard to the requests from France and Switzerland. On 27 January 1999, he decided not to issue an authority to proceed with regard to the request from Belgium. On 22 February 1999 and 19 November 1999 respectively, he decided not to issue an authority to proceed in respect of the second French and second Belgian requests.
Following my right hon. Friend's decisions, the extradition papers were submitted to the CPS as the prosecuting authority under article 7. The CPS, in turn, referred the papers to the MPS to enable the investigating authorities to consider them. The CPS also advised the police that the allegations contained in the Swiss, both French and both Belgian requests did not disclose offences that could be tried here, as the conduct alleged in each of the requests occurred before the relevant legislation came into force. Accordingly, the CPS did not apply for Law Officer consent to prosecute Senator Pinochet for torture in respect of the Swiss, French and Belgian extradition material.
In performing its role under article 7 of the convention in respect of the Swiss, French and Belgian material, the CPS also took into account the medical report commissioned by my right hon. Friend and the representations made to the him about Senator Pinochet's medical condition. As I said, the CPS concluded that no court in England and Wales would permit a trial of Senator Pinochet to take place in those circumstances, whatever the evidence.
The CPS consulted me about those matters and I agree with its conclusions.

Mr. Edward Garner: I begin by thanking the Solicitor-General for early sight of his statement and also for the assistance of his officials this morning.
The Solicitor-General told us that the evidence provided by Spain would not be admissible in criminal proceedings in this country. When did that become apparent to the CPS? Was it made clear in any of the several hearings in the courts during the past 15 months? When were the Spanish authorities told?
If there is no prospect of conviction in this country, does it follow that there has been, and remains, no prospect of conviction in Spain, France, Belgium or Switzerland?
Does it follow from what the Solicitor-General has said about Senator Pinochet's state of health that those four European democracies would also not allow a trial to take place in their jurisdictions—and if not, why not? Certainly, that is what the Home Secretary appeared to suggest a few moments ago. I presume that the Solicitor-General has made inquiries about that matter.
When did the Solicitor-General decide to refuse leave to prosecute General Pinochet under the Criminal Justice Act 1988 and the Taking of Hostages Act 1982? When did he tell the four European states that I mentioned of that decision?
The hon. and learned Gentleman referred to an application, last week, by a third firm of solicitors for consent to prosecute Senator Pinochet in this country. Has he reached a conclusion as to whether their evidence is admissible in any of the other four European states?
The hon. and learned Gentleman explained the law and procedure relating to European extradition proceedings. Irrespective of that, does the Home Secretary retain a discretion not to order extradition in any given case?
There remain in existence—if only formally—habeas corpus proceedings begun on 22 October 1999. What will happen to that case?
Finally, how will the hon. and learned Gentleman persuade the House and the public that this whole affair has been worth while and not just a lawyers' bonanza?

The Solicitor-General: The material rolled in during the past year; it was continually assessed. At no point was it possible to say that the evidence was sufficient for a prosecution in this jurisdiction. As I explained to the House, under the extradition provisions the requesting state simply provides evidence of allegations; it does not have to provide detailed evidence.
I had no need to tell Spain, because the responsibility of the CPS was twofold. On extradition, it was acting as agent of Spain, but as an independent prosecuting authority, it was simply acting in accordance with the law of this jurisdiction.
There was no refusal on my part to prosecute. As I said in my statement, I was never asked to give consent. The CPS decided that there was no case to prosecute in relation to the code. Consequently, I did not have to make a decision.
The material received from the solicitors last week was such that it could not be used to prosecute in this jurisdiction. It contained a series of allegations—obviously serious ones—but there was no admissible evidence that could be used in court.
On habeas corpus, the point is entirely moot because the particular person has now left the jurisdiction.

Mr. Denzil Davies: Will my hon. and learned Friend take it from me that I know nothing at all about the law and practice of extradition? Is it not true that, in criminal cases, the court usually decides whether the accused is fit to plead? Would an alternative course have been to allow General Pinochet to go to Spain and for a Spanish criminal court to decide whether he was fit to plead?

The Solicitor-General: That was not my decision. Inasmuch as I had responsibility for the CPS, my decision was to ensure that it acted in accordance with the current code for Crown prosecutors. In other words: was there evidence for a prosecution in this jurisdiction?
My right hon. Friend asked whether it might have been possible to decide in court on Senator Pinochet's fitness to plead. When it is quite clear—and it became quite clear after the medical reports—that no prosecution can occur, there is no way that a judge in this jurisdiction would allow a trial to begin.

Mr. John Burnett: I am grateful to the Solicitor-General for providing me with advance notice of his statement.
The case has been a long one. We welcome the review of the law of extradition announced by the Home Secretary. Will the Solicitor-General tell us whether there will be widespread consultations in respect of the review, and what the role of his Department will be?
We endorse the principle that those who commit abuses of human rights in one country should never assume safety elsewhere. I should be grateful if the hon. and learned Gentleman elaborated on the following words from his statement:
Whether or not the MPS institutes a full investigation in this or any other case is a matter for it to decide.
Did the CPS instruct, or endeavour to instruct, the Metropolitan police to instigate such an investigation?
The length and complexity of the case emphasise the need for an International Criminal Court to try human rights cases at a supranational level. The United Kingdom Government signed a statute of the International Court in Rome in July 1998, but they have failed to ratify the ICC treaty. Will the Solicitor-General provide us with a timetable for the publication of the draft legislation to ratify the ICC treaty? When will the Government ratify that treaty?

The Solicitor-General: The Law Officers' Department has only a limited role in extradition, and that applies in respect of Irish extradition. We may be consulted on some of the detailed legal aspects. However, there are always lessons to be learned from such cases. One issue that I flagged up to the House last month was the role of the CPS as agent of a foreign state. In our jurisdiction, there is a clear division between the police's duty to investigate and our duty to prosecute. The CPS does not tell the police what to do.
We are committed to the International Criminal Court. I know that my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs is very keen for legislation to get on the statute book in that regard. However, I can give no timetable for it.

Mr. Tam Dalyell: As Chairman of the all-party Latin America group, may I ask whether Law Officers—doubtless together with Foreign and Commonwealth Office lawyers and Home Office lawyers—are considering the delicate balance of whether the operation of the law does not sometimes conflict with reconciliation? The truth is that this case has opened a Pandora's box in Chile, which was increasingly becoming a stable society. Questions should be asked as to whether legal actions on one continent will create grief in other continents. The answer is another matter, but is the question at least being reflected on?

The Solicitor-General: Inasmuch as I can reply to my hon. Friend's questions, I simply say as a lawyer that law does not always lead to justice, nor does it always lead to reconciliation.

Mr. Douglas Hogg: May I reinforce the point just made by the hon. Member for Linlithgow (Mr. Dalyell)? Is not a general principle involved? When a democratic state decides, as part of a political accommodation, to put its past behind it, it is not for other countries to intervene with criminal proceedings. Is that not what was done in Spain with regard to the


Franco regime? Is that not what we ourselves are doing in Northern Ireland, where hundreds of convicted terrorists have been let out of prison and Ministers negotiate with people who are apologists for murder? At the end, we say that that is part of a process of reconciliation. We would be very angry if, for example, the Government of Holland tried to extradite Mr. Gerry Adams or Mr. McGuinness. Surely there has to be discretion and we have to recognise the right of democratic states to put their pasts behind them without other Governments intervening.

The Solicitor-General: In this case, we acted purely in accordance with our international obligations and with our obligations under the law on the statute book in this country. That may have had certain repercussions, but I cannot comment on that. We simply acted in accordance with the law. I certainly take the point that reconciliation can often be very valuable.

Ann Clwyd: Why have successive Attorneys-General in Britain refused to allow private or public prosecution on behalf of Pinochet's murdered British victims, William Beausire and Father Michael Woodward?

The Solicitor-General: As I explained earlier, the fact is that the evidence was not there. There must be evidence to provide a realistic prospect of conviction under the code of the Crown prosecutors. However, I associate myself with the remarks of my right hon. Friend the Home Secretary, who said that human rights abuses occurred in Chile and that those who suffered and their relatives feel a sense of injury.

Mr. Patrick Nicholls: Will the Solicitor-General confirm that, as a matter of law, if the President of China, the President of Zimbabwe or any other left-wing dictator with blood on his hands should come to this country and a warrant for extradition were received from another state, Her Majesty's Government would deal with that warrant in precisely the same way as the one for Senator Pinochet was dealt with?

The Solicitor-General: As I said earlier, we will act in accordance with our legal obligations. As a result of the review that my right hon. Friend the Home Secretary has initiated, those obligations may change. However, we will act in accordance with the rule of law.

Points of Order

Mr. Eric Forth: On a point of order, Mr. Deputy Speaker. You, Madam Speaker and the other occupants of the Chair are the guardians of the rights of Back-Bench and, where appropriate, Opposition Members. You will know that business questions is one of the most valuable occasions available to Back-Bench Members during the parliamentary week. Today, Madam Speaker saw fit—I in no way challenge her decision—to truncate business questions when, in my perception, Government Members had all had an opportunity to ask their questions, but a number of Opposition Members were still waiting to be called.
Will you, Mr. Deputy Speaker, and Madam Speaker consider whether an informal rule exists? When you have called all the Government Members does that automatically eliminate the remaining Opposition Members from being called? If that were the case—I hope that it is not—it would have serious implications. Like me, you will recall that business questions used to run until all Members had been accommodated. I hope that the matter will be considered seriously—I am sure that it will be—because I worry about the implications if Opposition Members were to be denied the opportunity to ask a business question because too few Government Members had bothered to be here.

Mr. Owen Paterson: Further to that point of order, Mr. Deputy Speaker. I am a regular attender at business questions. It is one of the rare opportunities in the week when a humble Back Bencher such as myself can bring important matters to the Government's attention.
I would have brought up the case of the dairy industry because I went to an emergency meeting of farmers in North Shropshire last week. Following the lamentable ignorance shown by the Secretary of State for Trade and Industry when he answered my question, I should have liked to have brought the issue to the attention of the Leader of the House and asked for a debate on it. Would it be possible to ask Madam Speaker always to allow all Back Benchers to be called in business questions?

Mr. Deputy Speaker (Mr. Michael Lord): Madam Speaker always deals as fairly as possible with such matters. I shall see that the points that have been raised are brought to her attention.

Mrs. Gwyneth Dunwoody: On a point of order, Mr. Deputy Speaker. Before I become totally paranoid, may I ask for your support and protection? For the second time today, the press in what I hope is a demonstration of frustration and not malice have taken to bombarding me from above with notebooks and pens. Will you encourage them to desist?

Mr. Deputy Speaker: I am sure that the press will have noted the hon. Lady's comments. I am sure that she does not need my protection to deal with such matters. I will see that her point is brought to the attention of those responsible.

Welsh Affairs

Motion made, and Question proposed, That this House do now adjourn.—[Mrs. McGuire.]

The Secretary of State for Wales (Mr. Paul Murphy): At ten past 12 on 17 October 1944, when war was still raging, the first Welsh day debate, as we have come to call it, was held. It was opened by Lady Megan Lloyd George—then the Liberal Member for Anglesey but who later became the Labour Member for Carmarthen—and contributions were also made by the Member for Ebbw Vale, Aneurin Bevan, and my first predecessor as Secretary of State, Jim Griffiths. They argued that the debate was inadequate in the sense that devolution was necessary to address Welsh problems.
Indeed, that was just like 100 years ago—the Labour party is celebrating its centenary—when Keir Hardie told the people of Merthyr and Aberdare that we should have some form of home rule. Now we have it, and yesterday was the first St. David's day—and this is the first Welsh day debate—since devolution.
Nine months have passed since my predecessor's functions were handed to the National Assembly for Wales. There have been some painful moments, but it is a new, young, democratic institution, which the people of Wales voted for in their referendum.
There is undoubtedly a need, over the three or so years before the next elections are held for the National Assembly, for some stability to be recognisable in the Assembly. None of us would want to see a repeat performance of what occurred some weeks ago.

Mr. Llew Smith: My right hon. Friend will be aware of the report from the National Audit Office and the Select Committee highlighting how Gwent tertiary college was just about destroyed by the previous principal and senior management. He will also be aware that a dispute is going on in the college because staff seeking a wage rise, not having received one for three years, went on strike yesterday afternoon. Would my right hon. Friend care to comment on a letter sent by the present chief executive, of which I have a copy passed to me today by the Gwent Gazette, the local newspaper, in which the chief executive encourages young kids to cross the picket line to break the strike? That has serious cost implications, and we now have a situation in which the chief executive—

Mr. Deputy Speaker (Mr. Michael Lord): Order. I hope that the hon. Gentleman will not continue his intervention, which is already very long. We have only just started the debate, in which many hon. Members want to catch my eye. It will set a very bad precedent for the debate if there are interventions of this length. Therefore, I hope that the hon. Gentleman will come very briefly to his point.

Mr. Smith: Will my right hon. Friend dissociate himself from the sentiments in the letter, in which the chief executive is pitting students against staff to try to break a strike?

Mr. Murphy: I am intrigued as to how that intervention came on the issue of the need for stability in

the National Assembly. I can understand that there is also a need for stability in Gwent tertiary college. As a Gwent Member, I am very aware of what my hon. Friend is referring to. I hope that the principal and the trade unions will get together as speedily as possible. I certainly do not think that the letter to which my hon. Friend referred has helped matters at all.
I return to the National Assembly. I believe that, in the few months since it has been up and running, it has achieved many things for Wales. At this stage it is right for me to pay tribute to my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael), who unquestionably set the Assembly going on the right lines. He established it in its first months, and we should all wish him well, as indeed we should wish the new First Secretary, my hon. Friend the Member for Cardiff, West (Mr. Morgan), well, too.

Dr. Julian Lewis: I do not wish to dissent from wishing the hon. Gentleman well, but does not the Secretary of State agree that it has not set a good precedent that after the last two incumbents as Secretary of State for Wales went to the Assembly they proceeded never to vote, in one case, or on only one occasion, in the fulfilment of their parliamentary responsibilities in this House? Does he also agree that this sort of dual mandate is proving deeply unsatisfactory?

Mr. Murphy: The hon. Gentleman knows as well as I do that when there is a general election for this House there will no longer be such mandates, so far as my party is concerned. It is clear that the holder of the responsible job of First Secretary has an extremely difficult and onerous position in establishing the National Assembly.
In the months of its existence the Assembly has done many good things. It has, for example, established special relations with business in Wales, with the voluntary sector and with local government, in a way that has never been tried or tested elsewhere in this country. It has set in train a radical reform of post-16 education and training in Wales; it has launched "A Better Wales", which sets out a radical transformation of the quality of life of Welsh people over the next decade; it has brought a new approach to dealing with social exclusion; and for the first time ever the £8,000 million Welsh budget is being decided in Wales by those elected in Wales to deal with the priorities. In such a short time it has achieved much.

Mr. Allan Rogers: Is my right hon. Friend suggesting that the disbursal of moneys in Wales before the establishment of the Welsh Assembly was not done by elected Members?

Mr. Murphy: Of course not. It was done by my predecessors and the two Under-Secretaries who accompanied them. As I can be today, previous Secretaries of State could be questioned by Members of this House, by the Select Committee, the Grand Committee and so on. What I am saying is that there is now a much stronger, more transparent way of looking at the budget, because there are now 60 elected Assembly Members in Wales, and they are in a position to examine that budget. We are, too, of course, in the sense of looking at the overall budget. Not long ago I appeared before my hon. Friend the Member for Clwyd, South (Mr. Jones) and his colleagues on the Select Committee on Welsh


Affairs for five and a half hours. That appearance was all about money, too, so the opportunities for examination by elected representatives of the people of Wales are now doubled. It can happen here in this House and it happens in the National Assembly.

Mr. Dafydd Wigley: The Secretary of State has referred to the way in which money is distributed. A central question is the total money available. The right hon. Gentleman will be aware of the report from Brussels—the response to the single programming document on objective 1 status for Wales—which said:
The Commission needs to be satisfied that future financial resources will be available to provide public spending for the whole programme and cannot be satisfied that this will simply be reviewed in the forthcoming comprehensive spending review. A commitment to this effect needs to be included in the final SPD.
That is something we need to do this month. Is the right hon. Gentleman in a position, in conjunction with his Treasury colleagues, to give an assurance now so that we can give that commitment from the National Assembly in response to the SPD?

Mr. Murphy: The document was incorrect in its references to the forthcoming comprehensive spending review. We are in the middle of it; it started at the beginning of the year and concludes in July.
As a Member of the National Assembly as well as of this House, the right hon. Gentleman knows that the document—the plan—is an agreement between the European Union and the National Assembly. My hon. Friend the Member for Cardiff, West indicated to the Assembly this week that in no way did that comment mean that the Commission would block the plan when it came up for further consideration at the end of March. I cannot give an assurance of the type that the right hon. Gentleman seeks, because we are still in the process of that spending review. We have gone over these matters many times. Obviously, it is a hugely significant issue for Wales. I am given to understand that the progress of the plan will not be hindered by the comments to which the right hon. Gentleman has just referred.

Mr. Alan W. Williams: I should like to quote to my right hon. Friend the following words of my hon. Friend the Member for Cardiff, West (Mr. Morgan):
The Commission has confirmed that it does not intend to block the single programming document until the spending review is completed later in the summer.
Therefore, the Commission is quite willing to wait until July.

Mr. Murphy: My hon. Friend reinforces the point that I have just made.
I return to our roles as Members of Parliament and Ministers here. I am the thirteenth Secretary of State for Wales. The job has changed. It is to protect the settlement; to symbolise the place of Wales in the United Kingdom; and to represent Wales in the Cabinet and the Cabinet in Wales. It is also, with Members of this House and the other place, to steer through primary legislation for Wales. There are at least half a dozen Bills going through the House—the Local Government Bill, the Learning and

Skills Bill and others—in which there are very large Welsh sections. Some 35 per cent. of the Learning and Skills Bill relates to matters specifically affecting Wales.

Mr. Gareth R. Thomas: As my right hon. Friend knows, I represent a London seat, but it contains some 2,500 people of Welsh descent, a delightful Welsh chapel and the very active Harrow Welsh society. It is also close to the Welsh school in Willesden, which, as my right hon. Friend will also know, is experiencing financial problems.
As my right hon. Friend stalks the corridors of Whitehall and Westminster, will he be able to ensure that the educational needs of Welsh people living outside Wales will be given some consideration?

Mr. Murphy: It is difficult enough to represent Wales in the House of Commons; representing the Welsh diaspora as well is even more difficult. I accept, however, that the Welsh school plays a significant part in the lives of Welsh men and women—and, obviously, children—in London, and I will make appropriate representations to my right hon. Friend the Secretary of State for Education and Employment.
Our roles as Members of Parliament have changed. I mentioned the Select Committee on Welsh Affairs, which must now find a new role and, in my view, is dealing with that very well. The Welsh Grand Committee still meets, and provides a forum for those who represent Welsh constituencies. Welsh Question Time has changed as well. I should, however, mention something else, because it has been mentioned to me by Members on both sides of the House. Those of us who represent Welsh constituencies are not London Members; we are Welsh Members who happen to be in the United Kingdom Parliament, which happens to be in London. That should be put on record because, as we enter a new constitutional age, nomenclature is important.
As for our constituency work, I have no evidence—I am sure that the same applies to my colleagues—that our postbags have diminished. Moreover, our role here as representatives of the people of Wales has not diminished either. Nevertheless, I feel that we should, along with our colleagues in the Assembly, develop a new role enabling us to work together for the benefit of our communities.
The settlement—the contract with the Welsh people that devolution constitutes—is concerned with, above all, the place of the Assembly in the United Kingdom as well as its place in Wales. The relationship between the Assembly and the House of Commons is hugely significant. We are all in this game—this business of governance—to improve the quality of life of Welsh men, women and children, and we can do that together.
I think that the ultimate test of any politician, wherever that politician is a Member, is whether at the end of the term of office—here, or in the Assembly—the people he or she represents enjoy a better quality of life than when that term of office began. I also think that Members of Parliament and Members of the Assembly can bring that about together.
During that first Welsh day debate in 1944, Aneurin Bevan spoke of the problems confronting the people of Wales. We would do well to heed his advice today as we


take stock of the progress that we have made in the past nine months towards democratic devolution—towards what I call "partnership with a difference". Bevan said:
What is the problem that I, and my colleagues, were up against between the two wars? We had in Wales, in the Welsh valleys in particular, a problem arising out of unemployment in the basic industries. I spent most of my adult life in the shadow of unemployment, because the basic industries happened to be situated largely in South Wales. Our problem was to try to get enough political leverage to secure attention for our difficulties.—[Official Report, 17 October 1944; Vol. 403, c. 2313.]
The words
enough political leverage to secure attention
are another way of saying that Wales's problems, then and now, need that "partnership with a difference" between our Assembly and our Parliament and Government.
As ever, Bevan started from where his people were—from their lives, concerns and aspirations. He put it all in a universal context, recognising that the task of the politician is to be the tribune and the advocate of the people in terms of their hopes and aspirations for a better life. That, in my view, is what politics is all about. If we fail the people, the democratic institutions that we cherish, and have only just established, will fail as well.
There are a number of contexts in which we can tackle together the problems that afflict the people of Wales. That is why the Chancellor of the Exchequer set up three task forces representing the United Kingdom Government and the Governments of Wales, Scotland and Northern Ireland, to deal with the knowledge economy that is so vital to the future of Wales, with child poverty and with pensioner poverty. The other important reason that the Assembly is joining this Parliament in considering stability in the years ahead is the importance of delivering the services that it is charged to provide, just as we are in the United Kingdom Government.

Mr. Paul Flynn: My right hon. Friend mentioned pensioner poverty. As he knows, one of the Government's main promises and priorities was to help the poorest pensioners. Is he aware that no action has been taken to discover the identity of the 700,000 poorest pensioners in the United Kingdom—many of them in Wales—whose income is below the minimum income guarantee level? Action was promised in April 1999 and again last month, but, as I say, none has been taken. Will my right hon. Friend use his good offices to ensure that a scheme to alert the poorest pensioners to the availability of benefits will be initiated in the near future?

Mr. Murphy: I can give my hon. Friend that assurance. It is obviously important to identify as many people as possible who can qualify for the benefits that the Government have given.
The Government have been tackling social exclusion, poverty and worklessness, step by step. Since the last St. David's day debate, more than 100,000 low-paid workers in Wales have benefited from the first ever national minimum wage. More than 80,000 Welsh families have benefited from the working families tax credit. Families have received the biggest ever increase in child benefit. Unemployment in Wales has fallen by 9,000, to a 20-year low. Youth unemployment has been cut by 75 per cent. since 1997. Pensioners' winter fuel

allowance has been guaranteed, and more than half a million pensioners in Wales benefit from that. Moreover, the new deal, which has already helped more than 10,000 young people in Wales to find jobs, will be extended to all unemployed people. Pensioners over 75, of whom a quarter of a million live in Wales, will be given free television licences.

Mr. Lembit Öpik: Notwithstanding the list of the Government's contributions that the right hon. Gentleman has given, does he agree that there seems to be a different cycle of economic development in different parts of Wales? Some parts, especially rural areas, are in recession. Is not one of our roles to do what we can to deal with the poverty trap in desperately poor rural areas?

Mr. Murphy: Of course I agree that poverty is not limited to urban and industrial areas. Over the past few months, we have engaged in many a debate on such issues. However, all the measures that I have outlined apply as much to rural as to urban areas, and I think they are all hugely significant in reducing the poverty of our people in Wales.
The whole business of reducing poverty and improving lives can happen only when there is a stable economy that can help to produce schools and hospitals, and there is no doubt that my right hon. Friend the Chancellor has produced just that. We have a good, strong, stable economy, and that is the basis on which we can work in Wales to secure a better life for our people. We are making work pay, and giving everyone who wants to work an opportunity to do so. We are fighting for the families of Wales by keeping inflation under control, and keeping interest rates down. The most effective support for social inclusion is work, and the Government have made getting Wales off benefit and into work their priority. We have been able to make progress because we have got the economic fundamentals right. We did not go for the soft options proposed by the Conservative party, and as a result, unemployment has continued to fall.
I shall be interested to find out, when the hon. Member for Ribble Valley (Mr. Evans) rises, what he will tell the House about the new deal and the working families tax credit, and whether he agrees with the shadow Chief Secretary, the right hon. Member for Wells (Mr. Heathcoat-Amory), who told the House that no future Conservative Government would want to make use of European structural funds.
I deal briefly with economic developments in Wales. The Government's key themes of modernisation, enterprise, fairness and partnership are having a major impact on the Welsh economy. In the past few months, I have been privileged to go around Wales, visiting universities and colleges in Bangor, Swansea and elsewhere and launching information and communication technology centres in Ogmore vale and Merthyr. People are recognising that we transform our economies by constantly raising the skills levels of all our people.
The projects that have been launched in Wales in the past two years are legion. I shall not list them, but I know that my right hon. and hon. Friends will be able to point to examples of first-class economic development in their constituencies, where highly skilled jobs have resulted from the Government's economic policy.

Mr. Ted Rowlands: My right hon. Friend kindly mentioned his visit to


Merthyr, which was deeply appreciated, to see how we are trying to deal with IT skills. Is he conscious of the fact that training providers all over Wales are worried that with all the reorganisation that is going on, their work in financing and developing skills programmes might be disrupted? Will he therefore ensure that whatever else happens as a result of the Learning and Skills Bill, work will not be interrupted by the reorganisation proposals?

Mr. Murphy: The post-16 Bill's purpose is certainly to ensure that there is co-ordination between all training providers in Wales, and that Wales has a national policy for training. I am sure that the last thing that anybody wants is disruption of training opportunities. The Bill will give people greater opportunities. The details of the measure have yet to be discussed in the National Assembly because we are still passing the primary legislation. I know that my hon. Friend will be taking an active interest in those matters as the Bill progresses through the House.
The hon. Member for Montgomeryshire (Mr. Öpik) referred to the rural economy, and we could not have this debate without referring to the problems that have occurred in the countryside in Wales, as well as in England, over the past months. As I have said at Question Time, there is hardly a Welsh Member of Parliament who does not represent a farming community. Our constituencies are mixed. We are all deeply aware of the difficulties.
I am also aware that the rural development plan, which is being developed by the Assembly, our countryside Bill, which will soon be introduced, and our serious look at red tape will all have a good effect on the countryside. Farming is still a major employer, and Members of the House and of the Assembly need to work out the long-term future of farming in Wales.
In all the years that I have been in the House I have never had to perform so grave a duty as when I presented Sir Ronald Waterhouse's report on child abuse in north Wales. The report was a catalogue of the most appalling and unforgivable acts of random abuse and violence directed against some of the most vulnerable members of our society.
I made it clear then that the Government would not waste time in considering the report and taking any and all appropriate action. I am therefore able to tell the House today that the Government will bring forward an amendment to the Care Standards Bill to establish in Wales an independent children's commissioner on a statutory basis.

Mr. Elfyn Llwyd: I am delighted by the right hon. Gentleman's announcement. He will remember that I spoke to an amendment of that nature in proceedings on the Local Government (Wales) Act 1994 and, as I recall, he supported that amendment.

Mr. Murphy: I am grateful to the hon. Gentleman because I know that the establishment of a children's commissioner has support from all parties in the House and the National Assembly.
The House will know that the appointment of such a commissioner is the first recommendation of Sir Ronald's report. Within the scope of the Care Standards Bill the role of such a commissioner would be confined to

covering children in care. At the moment the Assembly is considering its proposals on a children's commissioner, and I am conscious of the fact that it is likely to seek to establish a commissioner with wider powers than could be accommodated in the Care Standards Bill. The Government will want to consider any Assembly proposals urgently and sympathetically when they are eventually published. Undoubtedly, we will want to discuss such proposals with the Assembly and seek speedy agreement on how they can be taken forward.
We have, in the Care Standards Bill, an opportunity to act now to protect children in care and we intend to take it. The commissioner will have statutory powers of monitoring and oversight of complaints, whistleblowing and advocacy arrangements for children in care. In addition to publishing reports, the commissioner will be able to examine the handling of individual cases of children in care.
All of us in public service have a duty to protect those in the care of the state. Sir Ronald's report showed that trust has been betrayed. By acting to establish a children's commissioner the House will be making its contribution to making such abuses and betrayals as few and far between as is humanly possible. None of us can guarantee that such abuse will never recur, any more than we can legislate to abolish evil, but we can use what powers we have to offer the maximum degree of protection from evil, and that is what the proposed amendment will do.
I repeat that I am conscious of the fact that the Assembly is still considering other roles for a children's commissioner, which was my party's manifesto commitment, and I know that other parties in the Assembly will agree to that measure. We will be in a position to meet the Assembly as soon as its Committee has considered the matter, and then we will have to consider the appropriate legislative vehicle.

Mr. Richard Livsey: The right hon. Gentleman will know that the Assembly's Health and Social Services Committee has already given detailed consideration to the proposals for a children's commissioner. Will he ensure that he takes on board some of the forthright views expressed in the Committee and that the matter will be dealt with expeditiously?

Mr. Murphy: Yes, of course. I understand that the Committee has not yet concluded its deliberations, but when it has done so, we will discuss these matters with the appropriate Members of the Assembly. We will then have to consider how best to proceed. We do not know when the Committee will complete its deliberations, and we are well into the Session, so we will have to see how we can accommodate the proposals later. In the meantime, it is important that Wales has a children's commissioner who, by statute, will be able to deal with children in care. That will be a tremendous step forward.

Mr. Martyn Jones: I, too, strongly welcome the idea of a children's commissioner for Wales. It will be a great step forward and is, as my right hon. Friend said, one of the many good recommendations of the Waterhouse report. However, there are question marks


over the report, and I hope that my right hon. Friend will confirm that there is to be a debate on it in the House, so that we can discuss it at length.

Mr. Murphy: I am aware of my hon. Friend's interest in these matters, and I assure him that there will be an opportunity in the not-too-distant future for a full debate on them, and I am sure that he will take part.
Our vision is of a Wales at the heart of British, European and international life, where all, regardless of creed, colour, ethnicity or language, can feel themselves part of a great world community and yet also be distinctively Welsh and British. The Wales that we seek is not one where people have to choose between their Welshness and their Britishness, any more than they have to decide between social injustice and economic efficiency. We can be proud to be both British and Welsh. We want a society where business can prosper, but where everyone who wants a job can get one that pays a decent wage and where families can realistically hope for public services to be of the highest quality. That is our vision for our new Wales as we enter the 21st century.

Mr. Nigel Evans: I am being schooled in the odd phrase in Welsh, so I shall say, "Gwyl Ddewi hapus i chi." Lord Roberts of Conwy taught me that, and one could not have a better tutor in Welsh. I hope that the next lesson will allow me to say, "Happy St. David's day for yesterday," which would be more appropriate than what I have just said.

Mr. Deputy Speaker: Order. I remind the hon. Gentleman that foreign languages are allowed in the Chamber, but an immediate translation must be added.

Mr. Evans: I said "A happy St. David's day to you", but it would have been more appropriate for yesterday than today. I hope that lesson 2 by Lord Roberts will take me that stage further.

Mr. Flynn: May I have a ruling from you, Mr. Deputy Speaker, that the Welsh language is a foreign language in this Chamber? This is the only real Parliament that Wales has. Are you saying that, in this Parliament, the status of the language is the same as that of Slovenian or Ethiopian or any other language?

Mr. Deputy Speaker: It was not my intention to give such a formal ruling. I was simply saying that, if words are used in the Chamber that some hon. Members do not understand, it is helpful if, immediately afterwards, the English equivalent is given, for the benefit of those such as me, who enjoy the Welsh language very much but do not understand it.

Mr. Evans: I give you an assurance, Mr. Deputy Speaker, that the rest of my speech will be in English, as the only other Welsh phrase that I know is the one meaning "Merry Christmas and a happy new year", which is not appropriate.
The Secretary of State began by speaking about the centenary of the Labour party. I overheard a Minister say the other day that he did not understand all the talk about

a 100-year celebration, as the party has been going for only six years. However, we congratulate Labour on its centenary. It is a great shame that more was not done by previous Labour Governments for the people of Wales.
It is also a shame that we debate Welsh affairs only once a year, and we did not have a debate at all two years ago. Two and a half hours has been spent on other matters today, and as I know that others wish to contribute, I shall be as brief as I can.
It is important that we have the St. David's day debate. The people of Wales and Members representing Welsh constituencies should not be sidelined. It is bad enough that we are constrained by the sort of questions that we can ask the Secretary of State and the Minister during Welsh questions when that rare opportunity arises, so it is important that the Select Committee and the Welsh Grand Committee continue to investigate Welsh affairs on behalf of the people of Wales.
The people of Wales can rightly be proud. I was proud of the way in which they conducted the rugby world cup last year in a world-class stadium in Cardiff. I will be at Twickenham on Saturday. I fail the Norman Tebbit cricket test time and again. Although I represent an English constituency, I shall be supporting Wales on Saturday, and I wish the team well.
The Prime Minister fails to recognise that there is a north-south divide. In Wales, as my hon. Friend the Member for Montgomeryshire (Mr. Öpik)—that will ruin his career—suggested a moment ago, there is a north-south-east-west divide. Certain parts of Wales are booming, and investment continues in places such as Cardiff. We cannot fail to see the cranes operating there, constructing new buildings, and the new investment that is being attracted. Further west, in parts such as Swansea, where I was born and lived for 33 years, it is much more difficult to attract investment.
The gateway to south Wales is the relatively new second Severn crossing, which has been open for four years. It is a great pity that it still does not have a proper name. Perhaps the Secretary of State and other Ministers with responsibility for the bridge would consider holding an open competition so that people in Wales and possibly other areas could suggest a name for the bridge, perhaps reflecting the links between England and Wales and the importance of the second Severn crossing.
I have not failed to notice the campaign organised by the Western Mail to make St. David's day a national holiday for Walezs. There is great merit in that. There is no reason why the people of Wales should not celebrate St. David's day. I was with some London Welsh people last night at their club, Daniels, where they were celebrating St. David's day.
There are still too many people in Wales who cannot find jobs and who therefore have 365 days of the year off. We must ensure that Wales remains competitive in the United Kingdom and Europe and globally. We have a global economy in Wales, so an additional bank holiday must be at the expense of an existing bank holiday. To make Wales less competitive would be a retrograde step for employment.

Mr. Simon Thomas: Does the hon. Gentleman accept that other European countries are fully competitive and have more bank holidays than Wales or England?

Mr. Evans: I am not sure whether other European countries are more competitive. The changes that were


made and the legislation that was introduced during the 18 years of Conservative rule have helped to make Britain far more competitive than some other European countries. To impose more burdens on business in Wales at this time would not be useful.
The Secretary of State presented a review of devolution and said that the Welsh Assembly had already achieved a great deal. According to the findings of the latest ICM poll, he is one of the 4 per cent. of the British public who believe that devolution has achieved a lot; 88 per cent. believe that it has achieved a little or nothing.

Dr. Julian Lewis: Let us be fair. Does my hon. Friend agree that one thing that has been achieved is that there is much less work for officials of the Welsh Office to do in London, which probably explains why the Box is packed with them today? Evidently, their duties weigh lightly on their hands.

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Gentleman will not make reference to anyone outside the Chamber.

Mr. Evans: I thank my hon. Friend. I know that there is great interest in the debate, and particularly in my speech. I expect that that is why there are so many people listening.
Part of the problem with confidence in the Welsh Assembly was the overselling of the institution in the first place, and the way in which it started, with the rigged leadership election which finally backfired. No one now trusts the Labour Government on the holding of referendums or internal elections.
That is one of the reasons why my right hon. Friend the Leader of the Opposition is in Wales today. He is not afraid to go to the people. He is in Monmouth with his truck, selling in Wales the message of saving the pound, which is extremely popular with people in Wales and throughout the rest of the country.
We know that the jury is still out on devolution. As we were reminded earlier, three quarters of the Welsh people did not vote for it, but it is still in its first year. The nine Conservative Members of the Welsh Assembly are working hard to ensure that it works well for all the people of Wales.

Mr. Chris Ruane: Will the hon. Gentleman give way?

Mr. Evans: No, I will not give way, as I know the point that the hon. Gentleman will make.
One of the priorities of the Welsh Assembly has been a new home for itself. We recall the farce about the siting of the Assembly—whether it should be in Cardiff or in other parts of Wales. The Secretary of State suddenly discovered that Cardiff was the capital of Wales and decided that the Assembly should be there. Then there was the farce about whether it should sit in the city hall or some other building, and now there is a farce about a new building. The Conservatives in the Welsh Assembly tried unsuccessfully to block the erection of a new building.
Page 30 of the White Paper on which the Welsh people voted, because there was no Act at that stage, stated that the Government estimate for acquiring and equipping a

building for the Assembly would be between £12 million and £17 million. When we questioned that, we were told that £17 million was at the top end of the estimate. Less than 12 months later, the cost of that building has been estimated at £23 million, with a contingency of a further £3 million. Few people believe that it will cost less than £30 million.

Mr. Llwyd: Will the hon. Gentleman comment on the difference between £230 million for Portcullis House and the odd £20 million for a new democratic Chamber for Wales?

Mr. Evans: I shall refer Portcullis House to the Chairman of the Public Accounts Committee because I am unhappy about any waste of taxpayers' money. The cost of the Scottish Parliament building ran out of control. It was said that it would cost £40 million, but it will cost more than £200 million. The people of Wales had faith in the White Paper on which they voted at the referendum, when the margin of victory was narrow. The White Paper stated that the cost was between £12 million and £17 million. It is now estimated at £23 million and £26 million. Something is wrong and someone should be brought to book because of it.

Mr. Jon Owen Jones: Portcullis house was initiated by the Conservative Government. Why has no Conservative spokesperson criticised the expenditure on that building? Is it because the money is being spent in London and therefore cannot be criticised, while the expenditure that the hon. Gentleman criticises is happening in Wales?

Mr. Evans: The hon. Gentleman should listen more carefully. I said that I had criticised the runaway expenditure on Portcullis House. I criticise such runaway expenditure on any public buildings on which taxpayers' money is spent.

Mr. Ruane: Did the hon. Gentleman vote for or against the expenditure on Portcullis House?

Mr. Evans: That happened several years ago. If a vote was held, it probably took place late at night. However, we are discussing the problems of buildings that are costed, but for which the cost then spins out of control. The hon. Gentleman must bear some responsibility. The Labour Government have been in power for the past three years. What have they done to ensure that they have a tight grip on expenditure on public buildings?
The people of Wales do not want expenditure on a new Assembly building. Those who have visited the building know that it is perfectly adequate; many people would describe it as luxurious when compared to some of the rooms at Westminster. The priorities for expenditure should be the health service, education and the police rather than plush accommodation for Assembly Members.
I referred to the farce of the leadership. The Prime Minister did not understand his devolution settlement. In a rigged voting system, the right hon. Member for Cardiff, South and Penarth (Mr. Michael) defeated the hon. Member for Cardiff, West (Mr. Morgan) by getting fewer popular votes. The contest was a shambles; control freakery at its worst. I was interviewed by John Humphrys on Radio 4 on the day after the contest. He said that the


result marked the worst day for devolution. The antics that preceded it were a disgrace, and the Prime Minister's dismissal of democracy in Cardiff as "fun and games" was arrogant. The removal of the Prime Minister's placeman and the choice of a new leader was a good day for devolution in Wales because at least the people of Wales had chosen him through their representatives.
Another problem surrounded the removal of the ban on beef on the bone. When the Welsh Assembly and the Scottish Parliament changed their minds and decided to consider the issue more deeply, it led to a paralysis of the Government. The Minister of Agriculture, Fisheries and Food changed his mind. He said that it was safe to remove the ban but that he would not do that without the agreement of the Scottish Parliament and the Welsh Assembly. That paralysis damaged the farming industry greatly.
Dual mandates have already been mentioned. As the Secretary of State said, when a Member of Parliament is also First Secretary of the Welsh Assembly, it is impossible for him to be here, and doing a proper job is extremely difficult. The voting figures illustrate the problem. All dual mandate hon. Members should consider which job they want to do. I suspect that they would resign their Westminster seats, as happened in Ceredigion.

Dr. Julian Lewis: Did my hon. Friend notice that, when I raised the matter in an intervention, the Secretary of State did not answer my point about the right hon. Member for Caerphilly (Mr. Davies), who does not lead his party in the Assembly and by January had not participated in a single Division in the House? Is that not an appalling abnegation of the duties of a Member of Parliament?

Mr. Evans: I agree. The right hon. Member for Caerphilly (Mr. Davies) is not alone. The record is 0 per cent. for several other dual mandate Members of Parliament. Their constituents would like a representative who worked full-time at Westminster to promote their interests.
Council tax bills will soon drop through the letter boxes of people in Wales. It will be an eye opener for many people to discover the following predictions. In Anglesey, the increase will be 16.5 per cent.; in Conwy, it will be 11.3 per cent.; in Powys, it will be 13.8 per cent.; in Swansea, it will be 14.1 per cent. and it will be a staggering 18.2 per cent. in Monmouthshire. Yet inflation is running at a little more than 2 per cent. There are four overspending local authorities in Wales. The other 18 unitary authorities have had to dip into their purses to subsidise them. However, the council tax increases, which average more than 10 per cent. in Wales, will seem pretty rich to people who were told during the general election campaign that there would be no tax increases. What is the council tax if it is not a tax? Pensioners have received a 75p a week increase, farmers' incomes have plummeted—they will find such increases unacceptable.

Mr. Llew Smith: Does the hon. Gentleman accept that council tax increases, especially in the poorest local authorities, have nothing to do with overspending or inefficiency, but everything to do with poverty? If he bothered to read research that was published this week,

he would get a better understanding of how that poverty affects communities such as mine, which desperately need a lot of money to build up public services and rectify the injustices that they experience. The hon. Gentleman should never forget that the increases are due to poverty, not overspending or inefficiency.

Mr. Evans: I do not discount poverty, but it is the responsibility of Labour-run local authorities, the Labour-dominated Welsh Assembly and the Labour Government. People in poor authorities, perhaps those who have incomes that are just above benefit levels and face such increases, will be the new poor in the hon. Gentleman's constituency. They will have to scratch around for the extra money. Poverty will not affect Russell Goodway, the leader of Cardiff, whose salary has increased to £58,000. The bill will be picked up by poor people in Wales. That is a scandal.
Let us consider business rates. Today's Western Mail includes an article headed "Tourism staggers under body blow of huge rates rises". The new rate rise for businesses may be 40 per cent. Many small businesses in Wales are involved in tourism and operate at the margins. That is another problem.
The countryside has been mentioned. Rural poverty is great in Wales. The debates that we have held on post offices and the threat to rural post offices has been mentioned by the National Federation of Sub-Postmasters, which believes that half the rural post offices in Wales could face closure if the changes to automated credit transfer goes through. Some of those post offices do 40 per cent. of their business through ATC and the assurance that automated teller or hole-in-the-wall machines will be installed in rural post offices is not much comfort when consumers will face a £2.50 charge every time they use them. That is a scandal.
There are problems in the national health service in Wales. We were told time and again that it was safe in the Government's hands, but the number of patients waiting for an operation has soared by 13.9 per cent. since they came to power. The number waiting more than 12 months has gone up 60 per cent., the number waiting more than 18 months has rocketed by 167 per cent. and the number waiting to get on the waiting list has soared by more than 50 per cent., but the statistics hide the fact that we are discussing human beings who are waiting for treatment on the NHS. Last year, I raised the issue of the Newport man who was given a waiting time that was longer than he would live if he did not have his life-saving operation. We cannot have those problems in the NHS in Wales. A report says that another 42 intensive care beds are needed in the Swansea and Bridgend region and I ask the Secretary of State to consider the problems that the people of Wales face there and to talk with the First Secretary about how better to alleviate them.
Farming is in a deep crisis—the worst for 60 years. In the Ceredigion by-election campaign, I visited a farm with my right hon. Friend the Member for Devizes (Mr. Ancram), the chairman of the Conservative party, at which a calf was destroyed because the farmer simply could not afford to take it any further. He would have been lucky to get 50p for it at market. It is appalling that farmers have seen their incomes drop by 75 per cent. in three years. The farmgate milk price has completely collapsed and some farmers have to have two or three jobs to make ends meet. That is the crisis that farmers face in Wales.
The Government still fail to understand that, in the most rural parts of Wales, the car is not a luxury, but a necessity. Extra taxes have been heaped on the motorist and it costs £165 a year more to fill up a car in Wales directly because of Government tax policy. I hope that the Secretary of State is having talks with the Chancellor to ensure that motorists in Wales are not clobbered again in the next Budget.

Mr. Owen Paterson: My hon. Friend understates his case. According to the Automobile Association, if all the increases in fuel duty, value added tax and road tax are added up the average motorist pays almost £900 a year more to run a car. As he rightly says, a car is the last asset that a poor family in rural Wales can afford to lose, because with it will go the job.

Mr. Evans: The Government fail to understand that public transport is non-existent in parts of Wales and depending on it would be ridiculous. My hon. Friend is right to remind us of all the other extra taxes—stealth taxes—that have been put on the motorist in Wales.
On education, the Government said that class sizes would fall, but after an initial fall they have started to increase. That is a particular problem. The National Union of Teachers is concerned that in six local education authorities—Conwy, Caerphilly, Merthyr Tydfil, Wrexham, Ceredigion and the Vale of Glamorgan—the number of junior school classes with more than 30 pupils on the register has already increased. The people were promised that things would get better, but we are starting to see them get worse.
There is also a fear over rural schools and parents at Bwlchygroes primary school in Llanfyrnach are appealing to the National Assembly against Pembrokeshire county council's closure plans. The school is one of five that the council plans to close to save money and we have to have assurances from the Government about their commitment to rural schools. The Learning and Skills Bill, which is going through Parliament, is seen as a threat to sixth forms because of the way in which funding is being changed. Education is our investment in our future and it should not be spun out of all recognition.
Objective 1 status has been mentioned and we can see from the 21 January report from the Confederation of British Industry in Wales headlined "Major manufacturing gloom in Wales" that there is a real problem. Certain parts of Wales look to objective 1 status to ensure that they can attract extra investment, but on 17 February I received a press release from CyberCall, a west Wales company that is looking to expand with more than 400 extra jobs. It is dependent on objective 1 funding and match funding coming through and it looks to the Government to stop playing politics with the issue.

Mr. Martin Caton: Will the hon. Gentleman give way?

Mr. Evans: Time is catching up on us, other Members want to speak and I am coming to the end of my contribution.
The Government should take cognisance of the Select Committee report, which was scathing about their treatment of that issue:
The current CSR negotiations are a test of the Government's commitment to Wales, and indeed of the Devolution settlement.

The Committee want the Government to get on with it, but the objective 1 report that they submitted to the European Union came back because the EU did not think it adequate. On page x, the Select Committee report says:
The Prime Minister has said that the Government will not let Wales down. Welcome though these assurances are, the Government's "trust us" approach is not enough.
That report was made by a Labour-dominated Select Committee.

Mr. Wigley: It is important to draw the House's attention to that valuable report, but is the hon. Gentleman aware that the Secretary of State responded by saying,
it is my view that the report is incorrect in its conclusion,
despite the fact that the First Secretary in Cardiff has said that it is a useful contribution to the debate on objective 1?

Mr. Evans: As far as the judgment on the report is concerned, I can tell the right hon. Gentleman whom I would believe. It is extremely important and influential and I hope that people will not close their eyes to what it says. Many in Wales are depending on objective 1 funding and they cannot wait until the end of the review.
The Government were elected under the banner "Things can only get better" and the Secretary of State said that he would be judged by what they did over their period in office, but can he say that things have got better for students in Wales, pensioners, motorists, farmers, those who are waiting for treatment on the NHS, taxpayers in Wales and the rest of the United Kingdom who will see stealth taxes go up by more than £40 billion in a Parliament, those in schools in Wales who look to a better service and those who are waiting for objective 1 match funding? There is only one conclusion: "It's worse than under the Tories" in Wales. [HON. MEMBERS: "That is what you say."] I am sorry—the words are not mine, but those of John Hopkins, Labour's Blaenau Gwent leader. In the Gwent Gazette on 10 February he said, "It's worse than under the Tories."

Mr. Llew Smith: That piece of literature was written in the English language. If the hon. Gentleman reads it again he will find that those are the words not of Councillor John Hopkins, but of the local newspaper. Councillor Hopkins did not make that statement.

Mr. Evans: I am sorry—the Gwent Gazette says that there was an "astonishing attack" on the Prime Minister and that the
people of our area were better off under the Tories than they are with Labour, he says.
That is a quote from Mr. Hopkins. I am sure that the spin doctors from Millbank have been on the phone—it will have been red hot because we all know how Millbank operates against discordant voices in Wales. A number of Labour MPs sitting here must feel that they were right and the Government wrong and we all know that the phones of one or two of them were red hot. I believe what John Hopkins says—it is worse than under the Tories and Wales is fed up with the Government's spin doctors. Wales is fed up with the political shenanigans and internal squabbles. Wales deserves a brighter, better future, and that is what the Conservatives will provide after the next general election.

Mr. Allan Rogers: It is always a pleasure to follow the hon. Member for Ribble Valley (Mr. Evans)—at least I will look good. I congratulate him on his profundity: he referred to the naming of bridges, public holidays, London parties and trucker Hague going through Wales. However, I must confess that towards the end of his speech he did apply himself to some real issues.
If the hon. Gentleman wants a campaign, will he join me on mine? I would much rather see the Welsh flag on the Cenotaph than have a public holiday on 1 March. I hope that my right hon. Friend the Secretary of State for Wales will join me in the campaign to pay tribute to all those Welsh people who died in wars in this century fighting to preserve our democracies and freedoms. Let us all join in the campaign to have the Welsh dragon on the Cenotaph. I will gladly trade it for a public holiday on 1 March.
I take the hon. Gentleman to task for castigating local authorities that have overspent. With his Government's reorganisation of local government in Wales, communities in the valleys could not afford to provide public services, except by stretching funds and sometimes overspending. The merger, for example, of Rhondda, Taff Ely and Cynon Valley councils—two of the poorest areas in Great Britain, by any socio-economic indicator—was bound to fail. It was done by his colleagues in government.
Some of my Labour colleagues are a little reluctant to give money to the poorest areas. Inclusive politics, which is the buzz phrase in Wales, goes out of the window when some of the richer parts of Wales are asked to give something to poorer parts—then we see the inclusiveness and brothers in arms. As always, the Welsh are happy to stab each other in the back on occasions and not to support themselves by running under the same flag, except perhaps on days when we play rugby against the English.
The Secretary of State is right to draw attention to Labour's achievements in Wales, but I was much amused to read the document that came around a little earlier that listed securing a yes vote in the devolution referendum as one of Labour's achievements. Many of us, and certainly the vast majority of the people of Wales, would not regard that as an achievement by any standard.
A peculiar view has developed: more government means good government. The more tiers of government there are, the better people are represented and the more democracy there is. In one sense, democracy is a finite thing; it is not extended by creating all sorts of organisations. Democracy can be destroyed, and democratic deficits or gaps can arise as a result of creating too many institutions. It will certainly eat up many already poor resources, which should be spent on education, schools, hospitals and other health facilities.
During the debate on the Welsh Assembly, all sorts of statements were made. My hon. Friend the Member for Neath (Mr. Hain) said that investors and industries abroad were queueing up, waiting for the Assembly to be set up; they saw that Wales was going to become a democratic country and they were prepared to invest. That was one of the arguments of the vote yes campaign: everyone was waiting for Wales to become democratic, as though it were not before.
I am extremely proud to be Welsh, but I am also proud to live in a British community which, from my experience—I have worked as a geologist in many countries—is probably one of the best to live in and enjoys a measure of democracy that most people in the world do not achieve. I do not think that setting up the Assembly extended democracy—it extended bureaucracy. [Interruption.] The right hon. Member for Caernarfon (Mr. Wigley), the leader of the Welsh nationalist party, scoffs at that. Is he daring to suggest that bureaucracy in Wales has not increased as a result of the setting-up of the Assembly?
Let us consider a point that the Secretary of State made: 60 Members are now making decisions that were previously made by three Ministers. Secretaries are coming out of our ears in Cardiff, all being paid very handsome salaries; it is all very expensive. Is that an extension of democracy and not simply an extension of bureaucracy? I cannot see how my constituents in the Rhondda, one of the poorest areas in Wales, have benefited from any democratic increment that was supposed to come with the National Assembly.
Like some Labour Members, Welsh nationalists talked about inclusiveness. Wales was going to enter into a great period of inclusive politics—brothers in arms, Welshmen marching forward into the new millennium. Wow. Look at what has happened over the past few months. What sheer hypocrisy was spouted during that referendum campaign.
What has happened since the Assembly was set up? Frankly, one great achievement is that we have created a class of political eunuchs in Wales—not just in Cardiff, but in Westminster, too. In Cardiff, 60 people are being paid to do a job that was previously done by three people. There is a hugely expensive superstructure, a point that was raised by the hon. Member for Ribble Valley in relation to the new building. There are now more civil servants in Wales, so there has been a huge extension of bureaucracy. We were not exactly writhing under the yolk of British rule before last summer.
I understand that the eunuchs of the Ottoman empire spent time extolling the Sultan's characteristics—I am not sure who in Wales could be classified as the Sultan in the harem. The eunuchs invented increasingly elaborate titles for themselves in the harem. I am not suggesting that that is paralleled in the Welsh Assembly, but there seems to be a preoccupation with status and titles—and it is not confined to the Members. The statue of Oliver Cromwell stands outside, and visions of that age are evoked in me when I recall that the principal officer serving the Welsh Assembly is called the Counsel-General, one of the most wonderful titles that I have come across. I am not sure who picked that term out of the mire. I wonder what he is all about.
I also wonder what some of the Cabinet Secretaries actually do for their salary of nearly £70,000 a year, with expenses on top. There is bound to be a limit to the number of cattle markets, newly opened roads or potholes that can be visited. Not many schools or hospitals seem to be in the pipeline. With all due respect—all of them are my colleagues and in the same party—it is not as though they make profound decisions.
The Secretaries do not really have to make decisions. The Assembly is rather like a glorified county council. Many right hon. and hon. Members have served on local


authorities. I had the privilege of serving on the old Glamorgan county council, which covered almost half of Wales. It took bigger decisions than many of those being taken by the Welsh Assembly.
I do not envy the role of the First Secretary, as I think that he has a very difficult job. However, one thing that he could do is reduce the number of Cabinet Secretaries. The great virtue is that it would free money to be spent where it should be spent, not on Welsh schools in London—I see that my hon. Friend the Member for Harrow, West (Mr. Thomas) has left the Chamber—but on schools such as the Rhondda special school for handicapped children. Water is coming through the roof and the yard is unsuitable as a playground for these very badly handicapped children. It is a shame to have spent £25 million on a new building for the Welsh Assembly when other buildings were available and there is not enough money to put three 1918 schools into a decent condition for our valley communities.
There is another virtue in getting rid of some of the Cabinet Secretaries. I understand why the former First Secretary appointed so many of them—he wanted a praetorian guard; people who would be loyal and back him through thick and thin. He wanted to ensure that, as a result of his patronage, whenever he was in trouble he could rely on their loyalty and backing all the way. Well, the events of the past few months demonstrate that one certainly cannot buy loyalty in Wales. I was disgusted by the great haste with which they all fled the field and left my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) on his own. He was further emasculated by the Welsh nationalists who preside over the Welsh Assembly. If ever a dirty deed was done in Welsh politics, it was when Plaid Cymru combined with the Tories and the Liberals to stab him in the back.
Of course, we are no better off. I criticise my colleagues in Cardiff as being eunuchs, but we are also castrated as Members of Parliament. As the Secretary of State said, we still have a role to play. We still have our postbags because people look to us when they desperately need help. In one sense we are the last resort for many of our constituents who have problems. However, we face difficulties in tabling questions to the Executive and we no longer have the ability to question directly in respect of certain areas of government.
That brings me back to my initial point, which relates to a profound democratic issue. Some 200 years ago, America sought independence on the basis of no taxation without representation. The argument was that if taxes were raised and paid, the people's representatives should have the right to know how the money was spent. Now, Members of Parliament are in the ridiculous position of raising taxes, deciding the level of taxation and saying how much should be allocated to Wales, but not having the right to monitor how it is spent in certain areas. We cannot chase the penny, and that is fundamentally wrong.
I am not proposing that decisions should be taken away from the Welsh Assembly—which exists, warts and all. However, there should be a mechanism to enable us to participate and to put direct questions to the First Secretary. Instead of more democracy, we have a democratic deficit.
The Welsh Assembly is an experiment and I know that I am being overly critical of it, but my criticisms are justified because the people of Wales were misled last

year. One has only to look at some of the statements that were made at the time to see quite how grossly they were misled on inclusiveness, for example. We have to give it a chance to win, but it is not for the Assembly to create a situation in which it can operate on its own. As I said year after year during the campaign, at the next election every Member of the Welsh Assembly will say of every proposal, "We would love to have done it, but we were prevented from doing so by Westminster. We do not have the chance to raise money or make laws."
There are already voices among the Welsh nationalists—quite rightly; at least they are not hypocritical about it—and elsewhere requesting more powers for the Welsh Assembly. The next election will be fought by every political party in the Welsh Assembly on the basis of more powers being transferred from Westminster. However, the Welsh people were not asked that question. Although, fractionally, there was a yes vote, had there been honesty, forthrightness and less hypocrisy surrounding the yes campaign in Wales, the Welsh people would have thrown it out.

Mr. Richard Livsey: This St. David's day is at the dawn of a new century. I believe that it is a good time for Wales and a good time to be Welsh. Wales has a higher and more respected profile in spite of the down side in the press and the media. However, that does not apply to London taxi drivers. Yesterday, when I was discussing St. David's day with a taxi driver, I told him that I had seen daffodils in Gwent yesterday morning. He did not believe me and said, "No. You have to put your daffodil in a pot and keep it in a warm place to get it to flower on 1 March." I replied, "I am very sorry, but I saw them two hours ago." He still did not believe me. There is obviously a big gap in perception between London and Wales.
There are great problems in urban and rural Wales. The question is what we can do about them here in Westminster and whether we have the right legislature in the Assembly to conquer urban and rural deprivation in Wales. Although I did not agree with much of what the hon. Member for Rhondda (Mr. Rogers) said, he pinpointed many current difficulties.
The rural-urban divide is a big problem in Wales. I am sure that many right hon. and hon. Members will have read in today's Western Mail an article by Rhodri Clark about rural Wales being left in the cold. I believe that it should be compulsory reading for Ministers.
The rural areas need to be reconnected with the rest of Wales. As they have fewer parliamentary seats because of their sparse population, urban representatives dominate in the Welsh Assembly and here in Westminster.
Since the 1960s, under Governments of both colours, the county of Powys has lost most of its transport infrastructure, including a huge amount of its railway infrastructure, its health authority, its ambulance service, three county councils, its police service base, its fire service and the Development Board for Rural Wales; and it is about to lose its probation service. That has resulted in a huge loss of decision making within our communities and a huge watering down of services. I would not advise anyone to travel at night in Powys, as, should they be unfortunate enough to have an accident on the road, an ambulance could not be guaranteed to arrive within the


statutory response times in the hours between 12 midnight and 8 am. Five years ago, it was guaranteed that one would be picked up by emergency services within that time. There has been a serious decline in those services.
As hon. Members have said, there is a catastrophic crisis in farming. In the previous financial year, many farmers in my constituency earned 39p an hour. Currently, some of them are making no money whatsoever. Although I realise that that is a consequence of global markets and the pound's strength, something has to be done about it.
We have, thankfully, been successful in saving our community hospitals, owing largely to a massive campaign and a sympathetic decision—for which we are very grateful—by the previous Secretary of State for Wales, the right hon. Member for Cardiff, South and Penarth (Mr. Michael).
In my constituency alone, in the past 30 years, 30 rural schools have been closed. We have also had to run campaigns to prevent bank branches and post offices from closing. From all that, hon. Members will perhaps appreciate why we have had to fight a type of guerrilla warfare—against the big battalions of Government, bureaucracy and multinational companies. We now face the threat of at least half our rural post offices being closed because pensions and benefits will be paid directly into bank accounts. However, many poor rural people do not have bank accounts.

Mr. Wigley: Does the hon. Gentleman accept that there is a crying need for greater resources for the health service and rural schools? Does not that need—with a Budget in two weeks—underline the need to ensure that we maintain current taxation levels, so that resources are available rather than given away in tax bribes?

Mr. Livsey: I entirely agree with the right hon. Gentleman. The Liberal Democrats' policy is certainly not to cut tax by 1p, as will happen in the next Budget, but to spend that money on the national health service.
An announcement was made only yesterday on additional charges for using bank cash dispensers. However, in many parts of my constituency, there is only one bank's cash dispenser within a 20-mile radius. The decision to increase the charge might seem rational to someone at the bank's headquarters, in Cardiff or Birmingham, but it will spell disaster for local rural communities.
Our farming community, and what little manufacturing industry we have remaining, is threatened by global economics. Massive job losses are occurring in both sectors. We pay up to 5p a litre more for petrol and diesel. Although we have received a little money from central Government for rural bus services, those services range from few and far between to non-existent. New technology could provide some of the solutions, but some of the new technology infrastructure is inadequate and not up to modern standards.
A consequence of the massive decline in farming is that many of our young people have had to emigrate to find decent jobs. Those young people are replaced by others who come to our area to retire. Although it is not the retirees' fault that a consequence of the prices that they pay for houses is to put the local housing market out of

reach of our younger people, or that they put additional strains on social services and the NHS—I do not criticise them personally; I welcome them—that is still the consequence.
There is much that we can and will do to reverse the downward trend, but it cannot be tackled properly unless the whole of Wales is properly unified, with a far greater sense of purpose and leadership than has to date been displayed. The main vehicle for regeneration will undoubtedly come from the National Assembly for Wales and from more enlightened legislation from Westminster, combined with the vital input initiated by the European Union.
The decline of the south Wales valleys has been devastating. I am privileged to represent communities in a part of the upper Swansea valley—an old industrial area containing some of the finest people whom one could ever wish to meet. They have an immense community spirit. Recently, however, global economics has overtaken them.
Lucas SEI, for example, closed because of the uncompetitive pound and rock-bottom wage rates in Poland. The whole operation was spirited away by the multinational company to eastern Europe. We have been left to pick up the pieces, and we are fighting back. The Amman and Tawe Valley Partnership, the Welsh Development Agency and other agencies, with the local elected hon. Members, are doing their best, and we have managed to get a new employer into the Lucas factory. Currently, however, it is employing only one tenth of the previous number of employees.
Every valley, especially in the coalfield areas, has declined. One has only to visit those areas to see the devastation that has been created largely by 18 years of Tory rule, but which is not being helped by the Labour Government's adherence to a far too strong pound and their current refusal to enter the euro zone. Now, the problem for Wales is that the type of decline that the valleys has experienced is rapidly being mirrored in rural Wales, especially in the decline in farming.
The plight of farmers is really terrible. Previously, Wales's Labour party leaders spent much time addressing the issue of the unity of urban and rural Wales. It is time that we again addressed that issue. The interests of Wales, whether urban or rural, should be considered as one entity. However, if we are to address many of those issues, we shall have to make the National Assembly more effective.
It was not surprising to learn that, yesterday—even on St. David's day—the National Assembly was impotent to take decisions on even relatively small adjustments to secondary legislation. The matter began initially with—I think correct—statements that Wales should be a GM-free area. However, because of legal advice, the Assembly could not proceed as directly in achieving that objective as it should have liked to do.
We also learned yesterday that amendments to proposals for performance-related pay and conditions for teachers may not be within the Assembly's province, and that the Assembly's decision on the matter may be pre-empted, at Westminster, by the Secretary of State for Education and Employment. I do not know whether that is true, but it is what is alleged.
I well remember speaking on Third Reading of the Government of Wales Act 1998, and saying that although establishment of the Assembly was an excellent achievement, the nature of the Act would greatly test the


new Assembly Members. I said then that the Assembly would be known for what it could not do rather than for what it could do for Wales, and that that would be a very frustrating experience for all those who were involved. It gives me no pleasure now to acknowledge that my prediction has been proved true sooner than I had expected.
The fundamental flaw that has to be addressed, whether we like it or not, is that the Assembly is unable to exercise primary legislative functions—[Interruption.] Ministers may say "Well!", and the hon. Member for Rhondda may say that that was not in the referendum, but throughout the 20th century, the Liberal Democrats' policy was that a Welsh parliament should be created and have primary legislative powers. As that model has not been adopted, the various chickens that I have been describing have been coming home to roost.
I am sure that that legislative need will be recognised, and that, in the not to distant future, the Assembly will be given the powers necessary to match actions with expectations in Wales.

Mr. Evans: Is the Liberal Democrats' policy to push to give primary legislative powers to the Welsh Assembly without a referendum, and to give it tax-raising powers without a referendum?

Mr. Livsey: I was talking about legislation, not taxation. Nor will I abandon my party's adherence to a very important 100-year-old policy of granting primary legislative powers to a Welsh Parliament.

Mr. Rogers: That was a good Liberal Democrat answer.

Mr. Livsey: Yes, it was. I am obliged to the hon. Gentleman.
This week's announcement that the Presiding Officer will, for example, have his own independent legal officer demonstrates another weakness in the 1998 Act. We failed to include in the Act amendments tabled by Liberal Democrats Members that would have enabled the Assembly to have three classes of civil servant. I remind the House that we advocated providing for Executive departmental civil servants; independent civil servants, who would have been designated to work with Members and political parties; and officers of the Assembly, similar to those at the House of Commons, who could independently proffer advice to Assembly Members.
I believe that three classes of civil servant would solve many of the Assembly's problems. I am also quite certain that such reform, in the medium to long term, will make the National Assembly a far more effective democratically accountable body.
The vexed question of match funding for objective 1 and objective 2 initiatives, which was the cause of such a hiatus in the Assembly a few weeks ago, would have been eased to some extent had the Assembly had tax-varying powers. That is probably the most contentious of the proposals that we put forward during the passage of the Government of Wales Bill, but it would have epitomised democratic power with responsibility, which the hon. Member for Rhondda mentioned just now.

Mr. Robert Walter: Will the hon. Gentleman clarify what he has just said about tax-varying

powers? Is it his party's policy that the Welsh Assembly should be given tax-raising powers without reference to a referendum of the Welsh people?

Mr. Livsey: I did not necessarily say that, because that is an important matter. I refer the hon. Gentleman to the Conservative peer, Lord Roberts of Conwy, who has advocated giving the Assembly tax-varying powers and said that it could lower taxes and Wales could become a tax haven.

Mr. Evans: We need clarification on this simple point. Is it Liberal Democrat policy to give the Welsh Assembly tax-varying powers without a referendum? Yes or no?

Mr. Livsey: Yes, of course it is. I am sure that the hon. Gentleman can read our manifesto, which has said that in the past. I do not know why he is trying to persuade me to abandon a policy that, as the hon. Member for Rhondda has said, is entirely logical.

Mr. Ruane: Does the hon. Gentleman think that a proposal to give the National Assembly for Wales tax-raising or tax-varying powers would receive the backing of the people of Wales, with or without a referendum?

Mr. Livsey: We would seek to persuade the people of Wales. The Scottish Parliament has tax-varying powers with a 3p limit. There are various ways of achieving tax-varying powers without going the whole hog, as some have suggested that we would like to do.
I regret that such a hard-working and honest Member of Parliament and of the Assembly as the right hon. Member for Cardiff, South and Penarth should have had such a rough ride in the Assembly, but—[HoN. MEMBERS: "Look behind you."] I am sure that you agree that people should not interrupt half way through a sentence, Mr. Deputy Speaker. There is an element of truth in the description that he was Whitehall's representative in Wales rather than Wales' representative in Whitehall. That perception, together with the vexed question of objective 1 match funding and the Treasury's inability to come up with the necessary transparent evidence of such funding, unfortunately left the Liberal Democrats with no alternative but to vote in the way that they did on the confidence motion in Cardiff.
To paraphrase George Orwell, all votes are equal, but some votes are more equal than others. I welcome the arrival of the hon. Member for Cardiff, West (Mr. Morgan) as the new First Secretary of the National Assembly for Wales. In the end, democracy has won in Wales. Like the Liberal Democrats, the new leader adheres to the concept of one member, one vote—or OMOV, as he fondly describes it. There is something satisfying in the fact that in Wales—a country of fair-minded people with strong democratic principles—people of all political perspectives were able to see justice finally done. The hon. Member for Cardiff, West has clearly said that other systems of election not based on one member, one vote will not be exercised again in Wales. I welcome that. It is real progress and the Liberal Democrats wish the new First Secretary well in his endeavours to obtain for Wales a fair settlement of United Kingdom resources with which to tackle the many problems that I have described in my speech.
I believe that the Secretary of State is of a similar mind to the First Secretary in wanting to achieve success for Wales. Now is the time for real leadership and unity for the whole of Wales. That is very much in the interests of its people. I am optimistic for Wales in the 21st century. It is up to us and the Members of the Assembly to give a lead. Wales and its people together are far bigger than all of us and they deserve greater success in the future.

Sir Raymond Powell: It is a pleasure to follow the hon. Member for Brecon and Radnorshire (Mr. Livsey). However, I challenge him on what sort of democracy has won in Wales in the past few weeks. What happened was not democratic. He referred to a resolution that was tabled in the National Assembly for Wales. There is no doubt that the resolution was provoked by the Welsh nationalists for the purpose of disquieting most of the Members of the Assembly.
If we analyse the vote, we find that the result was determined by the unelected Members of the Assembly. Nineteen of those 20 unelected Assembly Members belong to the Opposition parties. They all participated in the debate and voted. I found the attitude of the Opposition parties in the debate disgusting.

Mr. Livsey: rose—

Sir Raymond Powell: Let me finish this point first. Unless the facts go on the record, I doubt that the House will ever know what really happened. The Secretary of State handed in his resignation—

Mr. Paul Murphy: No, I did not.

Sir Raymond Powell: I am sorry; it was the First Secretary. My right hon. Friend the Secretary of State has only recently taken up the post—no wonder I forgot. We shall have a long time to remember him afterwards.
The First Secretary gave what I am given to understand was a brilliant speech and handed his resignation to the Presiding Officer. I am sure that Madam Speaker or her Deputy Speakers would not allow a vote to take place on a person who had already handed in their resignation. It was disgusting and humiliating for the person involved and those who participated. The vote should never have been called. The fact that it was called was clear evidence of the political persuasion of the Presiding Officer. Anyone who watches a re-run of the proceedings will know that what I am saying is true. Such procedures would not be tolerated in the House, but we would never have allowed the situation to arise. My right hon. Friend the Secretary of State should negotiate with Madam Speaker, the Deputy Speakers and the Presiding Officer of the Welsh Assembly so that they can at least ensure that it never happens again. They should also look at the procedure for appointing and dismissing a Presiding Officer.
The hon. Member for Ribble Valley (Mr. Evans) took about 15 minutes of my time. If we have a debate on Welsh affairs in future, we may as well have it in Westminster Hall because sufficient time is not available

in this Chamber. Perhaps arrangements could be made for a full day's debate on Welsh affairs before the end of this millennium.
I ask my right hon. Friend to consider the suggestion—not necessarily made by the Western Mail, because it always gets things wrong—for a public holiday on St. David's day. I do not want the Welsh nationalists to be able to say, "That was our campaign—we initiated it" because I made that suggestion on the Floor of the House in 1983 and I do not know whether some of them were here at that time.
Listening to my right hon. Friend's speech, I reflected on the two years and nine months that the Government have been in office and realised that he could have said a lot more. He might have done if he had taken twice the time used by the hon. Member for Ribble Valley. He could have recited chapter and verse in respect of all that the Government have delivered since 1 May 1997, especially for Wales. I am not looking for a position on the Front Bench but just stating facts.
Perhaps my right hon. Friend will prepare a detailed statement for right hon. and hon. Members in all parts of the House. Such a statement was published by the Department of Social Security, dated December 1999. It contains key messages on welfare reform running to 15 paragraphs; fairness through reform of the Child Support Agency, 15 paragraphs; fairness through reform of pensions, 20 paragraphs; and fairness through reform of rights and responsibilities. We could publish another three or four pamphlets on the new deal. I have great praise for the efforts made by my hon. Friend the Member for Neath (Mr. Hain) to introduce the new deal system for us.
Another major reform was devolution for Scotland and Wales. In the 1970s, Labour party members and MPs wanted devolution and spent hours, days, weeks, months and years bringing that proposal before our annual conference at Llandudno in 1987. I was proud to be the chairman of the Labour party in Wales at that time and to witness devolution being adopted as party policy. It took many more years before Labour was elected and had the opportunity to introduce devolution.
Many constituents, party members and some Labour Members are critical of devolved power and the Welsh Assembly in general. Of course there is a lot wrong with it. There would not have been much wrong but for the system of proportional representation that was introduced, which created 20 unelected Members and 40 elected Members.

Mr. Livsey: Surely it is incorrect to claim that Members were unelected, given that the election was held as a consequence of primary legislation passed in this House. Those 20 individuals were legally elected under the PR system devised for the Welsh Assembly.

Sir Raymond Powell: One should examine in detail who was elected, how they were elected and to whom they are individually answerable. What rights do they have to hold surgeries? I found one in the surgery that I use at my town hall some months ago, sitting where I usually sit in an office that I normally use. He was a Welsh Assembly Member but not even from the Ogmore constituency. I do not know whether he was taking complaints on my behalf or on behalf of my daughter, who is a Member of the Assembly.
When the votes were counted, there were 27 elected Labour Members out of 40. Without the candidates on the list, the position today would be very different. We are having a meeting in Blaenau Gwent at the weekend on the subject of PR. Eight Tories got elected. Only one of them was elected by the people of Wales. Nine Welsh nationalists were elected but eight went on the list. The leader of the Welsh national party boasted in the Chamber about his membership but he has nine elected Members and nine appointees.
What have the Liberal Democrats to boast about? Have they got as many Members as the Welsh nationalists? No way—but still they had three unelected Members appointed to the Assembly. We were saved only by having the First Secretary elected under the system, and I was very glad about that.
My only consolation from all the voting was that my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) was elected. I want to say a few words about how much work my right hon. Friend put in to the Welsh Assembly. The Welsh nationalists may not appreciate that—half their Members were not elected anyway—but what my right hon. Friend accomplished was appreciated by many people in the Assembly. It is all right for anyone coming after him to take up the cudgels, but it is a different matter to start it from raw and create the situation that we have today.
I warn the Welsh nationalists, who keep warning the Labour party, against trying again the trick that they tried only a couple of weeks ago—the farcical idea of tabling a motion on a problem that they knew the First Secretary could not solve. They knew that the Treasury had no licence to give money to Wales and that the First Secretary could not obtain match funding for objective 1. We have learned a lot about objective 1; we can study it again. Next time, the Liberal Democrats might not get cold feet—they might come into the Chamber and turn the nationalists down. I warn my right hon. Friend the Secretary of State that we must have a solution to ensure that the people whom we elect in Wales are protected from someone who uses his office as Presiding Officer in the interests of his nationalist party.
Not only do I send my congratulations and condolences to my right hon. Friend the Member for Cardiff, South and Penarth, but I congratulate my right hon. Friend the Secretary of State on taking on this position. I am confident from the work that he has already accomplished for us in the Government, particularly in Northern Ireland, that he will fulfil his duties, as we expect of him, in a most dignified way. I wish him the best of luck and great support for the future.
The Opposition talked earlier today about the difficulties and problems of the Labour party. We are not hiding behind desks—we know that we have had problems. We had problems regarding our election for the leadership, and we have had problems since then that were no fault of ours. One of our Members happened to walk over Clapham common one Sunday night, causing uproar and disgust to a number of his colleagues in the House. That lost us votes, seats, support, Assembly Members and control of councils. It was undoubtedly one of the worst accidents that could have happened not only to the person concerned but to the party. The problems that we had were similar in size and upset to the problems of sleaze that the Tories had before the last election.
We have got over that problem, and I am confident that my hon. Friend the Member for Cardiff, West (Mr. Morgan) will take up the reins as the First Secretary of the Assembly. He will have my support and that of all his colleagues in the House. I hope that we will also see the friendliness, objectivity and comradeship that people talk about wanting for the Assembly, but which the Welsh nationalists, in particular, have not shown so far.

Mr. Elfyn Llwyd: I am sure that my contribution will sound moderate and, dare I say, contemporary compared to that of the hon. Member for Ogmore (Sir R. Powell). During the last Welsh Grand Committee debate, I was accused of whingeing and scaremongering. Some—not all—Labour Members said that there was no problem in rural Wales. One of them is in the Chamber now. Unfortunately, we have seen a deepening crisis in rural Wales, and I am afraid that I am not scaremongering.
I said in response to the Secretary of State's reference to the commissioner that I wholeheartedly accepted the Waterhouse report. It is a wonderful piece of work, and I respect him for doing it. I am glad that it will be implemented as soon as possible. The Government are doing many things that I can fully accept. I am not one of those professional whingers who finds against everybody on every count. That does nothing for anyone's credibility.
Our Assembly colleagues tried to sort out the agricultural crisis by introducing a calf-processing scheme and attempting to assist farmers but, every time that they have tried to help, they have been hampered by people in this place. The problems of tir gofal, organic aid, beef on the bone and others have all been made worse by the reluctance of the Ministry of Agriculture, Fisheries and Food to support the Assembly's proposals.

Mr. Flynn: Does the hon. Gentleman agree that 80 per cent. of farm subsidy goes to the 20 per cent. of farmers who are the richest, very few of whom are in Wales? Does he further agree that the NFU in Wales should campaign for modulation to ensure that the poorest farmers—those in real need—receive the subsidies being overpaid to the richest farmers, who are mainly in England?

Mr. Llwyd: I agree entirely and have no doubt that the hon. Gentleman is right. I hope that the NFU will conduct that campaign. However, the hon. Gentleman's party campaigned before the election for modulation, but it has changed its mind. That is one of life's funny quirks, but I hope that the NFU will pick up the ball and run with it after reading today's debate.

Mr. Öpik: Is the hon. Gentleman aware that modulation has been discussed by the Select Committee on Agriculture, and there is strong support for it among some members of the Committee, as well as further afield?

Mr. Llwyd: I am grateful for the hon. Gentleman's support; there is clearly—in the words that the hon. Member for Ogmore could not find—a consensual approach. There is a feeling that MAFF has been less than


helpful to the Assembly. If the Assembly decides—excuse the pun—to plough a particular furrow, I hope that MAFF will allow it to do so rather behaving as it has in the past.
There is a general rural crisis. The single programming document submitted on the Assembly's behalf does not include enough about the problems of rural Wales, although its amended form says more. The hon. Member for Newport, West (Mr. Flynn) rightly said that 80 per cent. of support goes to the richest farmers. In my area, most farmers are hill farmers whose incomes have dropped by 62 per cent. over the past two years—and they were hardly raking it in before that. Heaven knows how they exist at all.
The crisis is hitting not just one industry, but the whole rural economy. Shops and businesses are going down too. Every sector of agriculture has fallen. The width of the crisis distinguishes it from previous crises such as that of the 1930s. The situation in rural Wales is absolutely disastrous, but the historical relationship between sterling and farm incomes suggests that 2000 will see yet further falls as sterling continues to appreciate.
To be fair, I must say that the recession in agriculture is not affecting other industries, many of which appear to be doing well. However, incomes in the dairy sector fell by 21 per cent. between 1998–99 and this year. In less favoured areas, cattle and sheep incomes have fallen by 28 per cent. There are few farmers now in the pigmeat industry, in which the crisis has come to a head. We all know of the deepening crisis in the dairy industry.
This is the fifth year of recession for the agricultural industry. How long can it go on? The UK economy grew in 1998 by 2.2 per cent. In 1999, it grew by 3 per cent., and it will grow by probably a little more than 3 per cent. this year. However, there are no signs whatever of a recovery in the agriculture industry.
I am not whingeing without making suggestions as to what can be done, although the suggestions are not mine, but those of the NFU. Several matters can be tackled. Sterling remains over-valued; that makes exports less competitive and renders domestic markets vulnerable to cheap imports. As sterling has appreciated, prices have collapsed. It is obvious what the answer is on that matter.
The BSE crisis left the industry with greatly increased costs throughout the supply chain and with little or no export market for British beef. The collapse in world commodity markets brought on by the Asian and Russian financial crises had impacts on wool prices and so on.
European legislation allows for about £450 million compensation for UK agriculture during 2000—£47 million of that is immediately available to Wales. So far, the Government have promised to pay only 20 per cent. of that to the UK—less than 12 per cent. has been committed to Wales. The agrimonetary compensation package is vital. When the Secretary of State speaks with his colleagues, I urge him to request clarification of that matter.
We understand that there will be a contribution through the Fontainebleau agreement, but the industry is in crisis. Surely if his colleague, the Secretary of State for Trade and Industry, can stump up tens of millions of pounds for Longbridge—good luck to the people of Longbridge—we can have some support for Welsh farmers.
NFU Cymru—Wales—points out that net farm incomes in Wales average only £4,500. One of the Government's catch phrases is social exclusion—rightly. The Select Committee on Welsh Affairs—members of which are in the Chamber—is examining that subject. Considerable work has already been done and evidence has been taken. I hope that useful reports will be prepared in due course, and that the Government will respond accordingly.
However, the Government are not doing anything for social exclusion in rural Wales. I shall not do my credibility any good by agreeing with the Conservative spokesman, the hon. Member for Ribble Valley (Mr. Evans), but his comments on transport and fuel prices in rural areas were right—cars are a necessity, not a luxury.
Will the Minister lend his considerable support to a campaign to persuade Barclays to reconsider the mass closure of its banks in Wales? Two such closures are proposed in my constituency. One is in Blaenau Ffestiniog—an area that was hard hit economically. Now it is recovering and much work is being done, but Barclays has announced that the branch will be closed.
The other proposed closure is in Harlech. I have written to the chief executive and the chairman of the bank to ask for a meeting. I hope that some good will come of that. However, if the Government are serious about tackling social exclusion, I urge the Secretary of State to play his part in that matter—I know that he is a serious gentleman. Other hon. Members in the Chamber face similar threats to rural and urban branches and the matter needs to be addressed. Government intervention would bring about a change. I urge him to consider the matter.
I shall deal briefly with the subject of post offices, because they have been discussed on several occasions. However, the subject is important in rural Wales. The post office is a crucial element in the provision of support to people on low incomes in rural areas. Together with the church, the chapel and possibly the pub, it gives a village a heart. The post office and the small shop are vital.
I live in a village near Bala, where there is one shop. The proprietor told me, "If I lose the post, I'm closing. That's it." Fortunately, I have a car. Many people—some of them retired and on benefits—will not be able travel to the next town just to do some basic shopping without paying £5 or £6 for a return trip. That is how important post offices are to me. I am acutely aware of the problems—as, I am sure, are many Members. We need to consider the fact that the Government seem hell bent on introducing automated credit transfer. It will create havoc in rural areas—I cannot put it any higher than that. It has realistically been estimated that up to 60 per cent. of existing post offices will be under threat if the ACT system is introduced.
For I all know, the Minister for Competitiveness may be sincere in what he says; he has worked in the postal industry. However, I am worried about the way in which the Department of Social Security will approach the matter. Only a few years ago, it tried to get the elderly to receive their money directly in a bank account. In fact, it made it difficult for them to do otherwise. Such an approach would harm post offices in rural Wales. We know that 63 per cent. of the existing post offices in Wales receive 40 per cent. of their turnover from carrying out such transactions. The issue is extremely important.
I am not scaremongering. I am deeply worried about the issue. I live in a community in which people are desperately concerned, and I am rightly raising that concern at this stage. I hope that the Minister will take the issue on board, because there is no doubt that it will impact on rural Wales far more than on the rest of the United Kingdom.

The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): Will the hon. Gentleman accept that the Government have said that those members of the public who want to can continue to receive their payments in cash both before and after 2003?

Mr. Llwyd: Yes, I accept what the Minister says on the face of it. However, I do not know what the Department of Social Security is planning to do. Only a short time ago, under the previous Government, DSS mandarins decided that they would close a third of the benefit offices in Wales and they did not even bother to tell the relevant Minister about that. He was alarmed, and I do not know what the hidden agenda is any more than—

Mr. Alan W. Williams: The hon. Gentleman is scaremongering.

Mr. Llwyd: The hon. Gentleman also said that in the Welsh Grand Committee. The only word that he seems able to use is "scaremongering". Perhaps his constituency is different and is immune from the problems that affect the rest of Wales. I hope for his sake that it is; he might even save his seat.

Mr. Williams: I thank the hon. Gentleman for giving way having drawn me into intervening. Will he engage in some joined-up thinking? Earlier he referred to bank closures in Blaenau Ffestiniog and Harlech, and, of course, we regret that when it happens. However, does he not realise that the Post Office will have a great opportunity to develop banking services? The Government are working hard, through the computerisation of all rural post offices, to diversify the services that post offices will be able to provide. In particular, they will be able to offer banking services.

Mr. Llwyd: That argument has a flaw. It is said that automatic cash dispensers will be placed in post offices, and that is fine. However, I tell the hon. Gentleman that they are extremely costly to install and, in many areas, banks were not able to afford them. Even if they are installed, the best reckoning is that it will cost £2.50 a transaction. The hon. Gentleman shakes his head, but he is no expert on the subject. The accepted truth is that it will cost £2.50 a transaction.

Mr. Simon Thomas: Is my hon. Friend aware that many sub-postmasters in my constituency complain that they do not have the turnover to get a national lottery terminal in their sub-post offices, let alone one that would allow a bank to put in an automated teller machine?

Mr. Llwyd: My hon. Friend is right, because we are talking about rural areas. What exactly will a village shop diversify into? For heaven's sake, what can it diversify into? There is nothing much that it can do. It might be

able to add a few lines to what it sells, but it is pie in the sky to suggest that every post office will be able to trade itself out of a deeply worrying position.

Mr. Ruane: Will the hon. Gentleman tell us where he gets the figure of £2.50 for each transaction from?

Mr. Llwyd: The figure of £2.50 a transaction has been extensively referred to in the press recently. If it proves to be wrong, I shall gladly apologise.

Mr. Livsey: I support what the hon. Gentleman is saying. Under legislation, the regulator has no power to impose a 30p rate, and the banks have said that they are going ahead with a £2.50 charge.

Mr. Alan W. Williams: Not true.

Mr. Llwyd: I think that I have made the point sufficiently. There is real concern about this issue. I shall not dwell on it now, because it will be for another day. I have received numerous petitions on the subject, and I have sent them on to the Government. I hope that we shall be able to get them to reconsider this very damaging proposal. It might work in some urban areas, but it is certainly no good for any rural area. It will be extremely damaging for rural Wales.

Mrs. Betty Williams: What would be the hon. Gentleman's party's answer for a small village in my constituency, where the postmaster is giving up? The Post Office has written to say that it has advertised extensively to try to find somebody in the village to take over the business. That has nothing to do with the changes in 2003. If an answer is not found by the end of this month, that post office will close. There is another example in my constituency.

Mr. Llwyd: There are several answers. The first is that such businesses are now blighted, because the change is hanging over their heads. I have examples of post offices that have closed. Corners of village halls are being adapted for a few hours a week. It is possible to do that. There is no point in the hon. Lady's shaking her head. She asked for a response and I have given her a reasonable response. We all have the same problems.
Let us see what happens in the coming months. Some people from the hon. Lady's own party are campaigning on the matter. Her neighbour, the hon. Member for Clwyd, West (Mr. Thomas), is campaigning on it now, a bit late in the day. He is getting on the bandwagon. [Interruption.] Not a Hague wagon, but a bandwagon.
I shall leave the subject there. I have flogged it enough, and I do not want to bore the House. However, it is part of the question of social exclusion. In rural areas, public transport is, alas, very poor, and this will mean people having to travel distances for basic provisions. That is the problem facing some of our rural communities.
I ask the Secretary of State whether it is possible to shift the Government's emphasis to encourage small and medium-sized enterprises to take on labour. The truth is that 90 per cent. of the businesses of Wales are small and medium-sized, and many are in rural areas. That is something that surely could be done. There is the question of objective 1 money being used for it, in conjunction


with Government policy. I hope that we could look at this in order to assist the growth and revitalisation of rural areas.

Mr. Wigley: My hon. Friend has emphasised the crisis hitting the rural areas, where the post offices are under threat. If they are under threat now, they will be that much more under threat if the changes are made. That does not apply only to rural areas. Sub-post offices in suburbs and some of the mining villages in the valleys will equally be under threat. People in those communities will also be deprived of the services on which they depend.

Mr. Llwyd: Certainly.
I have made my point about the rural areas. There is a genuine crisis. The hon. Member for Brecon and Radnorshire (Mr. Livsey) was right to speak as he did about our problems.
On the positive side, I welcome the new deal, despite the cost of implementing it. It is a step in the right direction, and I am pleased that it is happening. It is having some effect. As the Secretary of State said, it is having an effect in rural Wales as well. It is disproportionately less, because of the sparsity of population. Nevertheless, it is a step forward.
In conclusion, I urge the right hon. Gentleman to look at the problems of rural Wales and do what he can, in conjunction with the First Secretary. We owe it to our constituents to ensure that we have a revitalised rural economy. If we do not, we shall fail our young people, who have to leave to look for jobs, and we shall imperil our culture, language and everything that we all hold dear. Large swathes of inhabited Wales will disappear from the map.
The right hon. Gentleman is a serious politician, and I hope that he will take this message on board.

Mr. Denzil Davies: Given that, as my right hon. Friend the Secretary of State pointed out, this is the first Welsh day debate since the Assembly has been up and running, I am tempted to engage in a brief discussion of the relationship between Westminster and Cardiff bay, but, because of the few minutes available to me, I shall not do that. Instead, I shall speak of what is understandably the hottest subject in Wales: objective 1 status. When my right hon. Friends the Prime Minister and the Chancellor of the Exchequer secured objective 1 status, they also secured about £1.2 billion from the European Commission.

Mr. Caton: I hear what my right hon. Friend says, and I have heard the Prime Minister, the Chancellor of the Exchequer and, indeed, the Secretary of State make the same claim. Moreover, I have heard members of Plaid Cymru claim that their party secured objective 1 status. But should we not give credit where it is due? The Tories secured objective 1 status for us by running down the economy during their 18-year tenure.

Mr. Davies: I shall resist the temptation offered by my hon. Friend, and concentrate on the good work done by my right hon. Friends in Brussels. I do not know the

extent to which they realised that, although that £1.2 billion is very welcome, something approaching another £1.2 billion from the Treasury was needed to match it. If the Chancellor did not know that at the time, it must have come as a bit of a shock to him on his return. Perhaps the moral is that it is dangerous to be at the heart of Europe, because we do not know what we will get from Europe at the end of the day.
It may not be necessary to draw on all those guaranteed funds if and when they arrive, because funding for projects may come from other sources. Some may come from local government; some may come from other public bodies; some may come from voluntary organisations. Hopefully, much of it will come from the private sector. Indeed, if projects are not financed by the private sector, they are probably not very good in any event, and are certainly not the wealth-producing projects that we want. However, there must be a lender, or provider, of last resort. The Treasury must be the provider of last resort if the £1.2 billion is not matched elsewhere, and the Exchequer must give a guarantee to that effect.
We in Wales may think that this is our peculiar problem, but I understand that it is also a problem for areas in England that have secured objective 1 status. The problems in Yorkshire are probably as great as those in the valleys of south Wales—and I believe that Yorkshire has obtained close to £1.2 billion. We all know of the problems in Liverpool, and those in Cornwall. This is not just a problem for Wales; it is a problem for the British Exchequer, for the British taxpayer and, ultimately, for the House, because the Exchequer is accountable to the House.

Mr. Wigley: I accept that it is vital for Cornwall, South Yorkshire and Merseyside to gain the full advantage of their potential from the funds, but is there not a difference between those areas and Wales? Public expenditure in Wales is defined according to the Barnett block, which was drawn up for the coming financial year—2000–01—before we knew that we would receive money from the European Union. As a result, any money that we must advance as match funding from the Barnett block will inevitably be granted at the expense of health, education or other services that it would otherwise have financed.

Mr. Davies: I understand the point, and I will deal with it, but what I am saying has nothing to do with the Barnett block. I was making the simple point that the problem is not peculiarly Welsh, but relates to Yorkshire and Liverpool as well. The funds that go to those areas must also be matched. We can discuss where the matching funds come from, and I shall do so in relation to Wales, but this is a British problem. British Exchequer money will have to be found as a last resort, and as the British Exchequer is responsible to the House, the House must be involved.
The right hon. Member for Caernarfon (Mr. Wigley) is right in respect of Wales. In theory, the money could be provided as a first charge on the Welsh block grant. As he rightly said, if the money was drawn upon under objective 1 match funding, it would to some extent be denied to health, education and local government. I do not see how it is possible to operate the Welsh block budget against the background of a first charge of £1.2 billion. Quite apart from the consequences, I do not see how,


technically, we could spend money on hospitals knowing all along that there was a charge on that money for the payment of objective 1 match funding.
I agree with the right hon. Gentleman that although in theory that is possible, it is not realistic to expect the match funding to come out of the budget for education, health or local government. We all know of the pressures in our constituencies on the health budget and of the debts of health authorities and hospital trusts. There is pressure on local government, which in my constituency is having to close old people's homes.
The match funding can come only from Her Majesty's Treasury, as an ultimate guarantee which may not have to be drawn upon. I would understand if Treasury Ministers and civil servants were concerned about giving a blanket guarantee over six years for projects that had not been dreamt up. No one knows what those projects will be, and they may not produce wealth for Wales. How do we get out of that dilemma? It would be reasonable and sensible for that Treasury guarantee to be given with the condition that when projects concerned with match funding were conceived, they had to be approved by the Treasury and the Welsh Office. That would not be an open-ended commitment.
There is no such open-ended commitment now with the £1.2 billion from Brussels. The European Commission has to give its imprimatur to schemes. Brussels does not, therefore, simply write a cheque for £1.2 billion. If we are, through the House, calling on the Exchequer and the British taxpayer also to provide up to £1.2 billion—it is realistic to ask for that amount—it is right and proper in constitutional terms that the Treasury and the Welsh Office should approve each particular project, as the Commission does and as the Assembly has for the Cardiff bay project.
That would be fair because the match funding is not devolution money. By definition, it is additional to that. The devolution settlement is the block grant, and it comes to about £8 billion a year. That is to be spent by the Welsh Assembly. The match funding will come from the Treasury, which is accountable to the House, and the Welsh Office must also be involved.
There is another reason why there should be approval from central Government Departments such as the Wales Office and Treasury. In Wales, sadly, the amount of money raised in taxation does not come anywhere near the total amount of public expenditure that comes into Wales. About £7.5 billion to £8 billion of public expenditure goes through the National Assembly. Almost an equivalent amount comes to Wales outside the devolution settlement. Total Government public expenditure in Wales is £15 billion to £16 billion. However, the amount raised in Wales in taxation is about £10 billion, so there is about £5 billion leeway. The extra £1.2 billion, if it must all come from the Treasury, does not come from Wales. It does not come from Scotland. It comes from the more prosperous areas of England, whose taxpayers are asked to make that contribution.
The right hon. Member for Caernarfon made a speech some years ago—I hate to remind him of it, as he knows what I am about to say—in which he castigated the gin-swilling colonels in Surrey and Sussex. What he did not appreciate was the fact that the more gin they drink, the more money there is to pay the salaries of those who sit in Cardiff bay. That is the reality. We may like it or

dislike it; we may condemn the situation and blame people for it; but if there is, as I believe there should be, a guarantee of £1.2 billion, and if the money does not come from other sources, that money will have to come from the taxpayers—I will not call them gin-swilling colonels—in those areas of England that are far more prosperous than Wales, the north of England or parts of Scotland.

Mr. Wigley: I am grateful to the right hon. Gentleman for giving way. I will not go after the gin for the moment, although the argument advanced by the First Secretary in Cardiff is persuasive. He suggested that the Treasury has an interest in getting the economy in Wales buoyed up, because it will then have more take from taxation in Wales.
Before the right hon. Gentleman concludes his speech, will he address himself not just to the £1.2 billion of match funding, but to the £1.2 billion coming from Europe? That comes through to the Treasury, and in the coming financial year we will not get a single penny extra out of that money. It comes through to the Treasury, it is then passed to Wales, and it is netted off from our Barnett block. Those are the mechanics. That is why we are constrained in the difficult way that we are. The right hon. Gentleman needs to address himself to the £2.4 billion, not just to the £1.2 billion.

Mr. Davies: I am very fond of the right hon. Gentleman, but he is not at his best today. Sometimes he does all right, but today he has not been listening, or perhaps he does not want to hear. I stated clearly that £1.2 billion comes from Europe. That cheque will eventually end up in the Welsh Assembly. [Interruption.] If the right hon. Gentleman denies that £1.2 billion will come under objective 1, I do not know where we are.
Let us assume that I am correct. I know that it upsets the nationalists, but the Prime Minister and the Chancellor of the Exchequer manage to get funds for Wales, and also for South Yorkshire, Liverpool and Cornwall. We know that that is because the economies of those areas are in a bad way, and we are not happy about that. We know that that £1.2 billion will come. I conceded the point made by the right hon. Gentleman, on which we all agree, that under the crazy European system—I do not know who devised it—the £1.2 billion must be match-funded by almost a further £1.2 billion.

Mr. Wigley: I have the Select Committee report, and there are five members of that Committee in the Chamber. The report recognises that we need additional public expenditure survey cover in order to be able to use that money. Unless we get that additional cover, we are constrained to spending within the Barnett block. Unless the money comes in, in the form of additional PES cover, we will lose out on the European component, not to mention the match funding. The Select Committee recognised that, as I hope the right hon. Gentleman will.

Mr. Davies: The right hon. Gentleman is losing the plot. Let us start again. He should put his book down and think. The European Union will write a cheque for £1.2 billion for Wales. We need another £1.2 billion from the British Exchequer. My right hon. Friend the Chancellor of the Exchequer should guarantee from the Dispatch Box the £1.2 billion for Wales to match the


£1.2 billion from the European Union. However, the Welsh Office and the Treasury should vet the schemes. The right hon. Member for Caernarfon is nodding. I gather, therefore, that he accepts my generous condition of scrutiny by the Welsh Office and the Treasury.

Mr. Wigley: That can be argued in terms of financial control; I accept that each project has to be justified. However, I implore the right hon. Gentleman to accept that we need not only match funding cover, but PES cover.

Mr. Davies: How much more money does the right hon. Gentleman want? Wales receives £15 billion. We raise £10 billion through taxation, which leaves £5 billion. Wales is to receive £1.2 billion from the European Union, and I have said that the Chancellor should give us £1.2 billion—yet the right hon. Gentleman wants more money. After the debate, perhaps he can explain how much more money he wants on top of the £15 billion, the European £1.2 billion and the other £1.2 billion. I make the simple point that there should be match funding. However, that money cannot come from Wales.
I congratulate the hon. Member for Ceredigion (Mr. Thomas) on his victory. I watched the television when he made his victory speech. He said that he wanted to work himself out of a job and that although he was going to Westminster, he did not want to be there. I can understand that. Even the post-modern Welsh nationalist party believes in some form of separation and Welsh membership of the European Union. The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) nods. I am not sure, but I believe that he also wants to work himself out of a job eventually. To paraphrase a famous saying, "Make me chaste my lord, but not yet."

Mr. Llwyd: Yes, I am trying to work myself out of a job. Like the right hon. Gentleman, I could fall back on another.

Mr. Davies: Perhaps. I am trying to make a serious point. If the Welsh nationalist party wants to leave this place, so that there are no seats here for Meirionnydd Nant Conwy, Ceredigion or Caernarfon, where will the £1.2 billion for Wales come from? It will not come from the crazy policy of variation of taxes that the hon. Member for Brecon and Radnor (Mr. Livsey) proposed. If Wales is one of the poorest areas in Britain, how will we get more money by taxing Wales? That policy is foolhardy. Not even the Welsh nationalist party in its current state would argue that.

Mr. Paterson: Does the right hon. Gentleman know that for every pound we receive from the European Union, the British taxpayer contributes £2.12, according to the Government pink book? Would not it be preferable if all the schemes were repatriated and determined by national Governments so that twice the money could go towards the projects and decisions could be made swiftly?

Mr. Davies: If I pursued that, I would be called a Euro-sceptic or a little Englander. I shall not go down that road. The Treasury should provide match funding and I am glad that even the Welsh nationalists agree that a

condition should be attached to that, and that my right hon. Friend the Secretary of State and the House should play a part in vetting projects that use Treasury money.

Mr. Öpik: If the right hon. Gentleman was given the choice between a penny off income tax or £2 billion towards health, what would he vote for?

Mr. Davies: I shall not be drawn down that path.

Mr. Öpik: Tell us.

Mr. Davies: I am trying to give a short answer.
I agree that generally one should not cut taxes any further—we need the public expenditure. One can argue for or against these propositions, but as I understand it, when the married couple's tax allowance is taken away, as it will be from 5 April, and as mortgage interest relief is taken away, many people will pay more tax unless there is some reduction in what used to be called the standard or basic rate of income tax. We shall hear about that in the Budget, but I suspect that there will be a cut in the basic rate to compensate for one or the other, although I do not know whether that will work out perfectly.
I return to the 26 March Budget. I hope that my right hon. Friend the Chancellor announces that the Treasury will be the provider of last resort or guarantor for the £1.2 billion that may be required. It is perfectly possible to do so and I do not think that we need more, although the nationalists apparently do. I know that my right hon. Friend is a very tidy Scotsman and he wants to make sure that everything works perfectly. He wants to act—if he is to do so—in the comprehensive spending review, as it is now called. However, there was a time when public expenditure and the Budget were one and the same.
I am sure that my right hon. Friend will know the public expenditure totals when he stands up to announce them. If he does not, I do not know how he will be able to introduce his Budget. I hope that he makes the announcement on 26 March, he puts us all out of our misery and stops all the argument in Wales so that we can get on with rebuilding the Welsh economy.

Mr. Simon Thomas: As a new, inclusive politician from Wales, I begin by congratulating the Minister on the centenary of the Labour party. I do so as a son of Aberdare—I see the hon. Member for Cynon Valley (Ann Clwyd) in her place—who is proud to have been brought up there. The first Labour Member of Parliament was Keir Hardie, who represented Merthyr Tydfil. I am proud to call myself a Welsh socialist.

Mr. Hanson: Come over to us.

Mr. Thomas: A Welsh socialist, I said. I hope that the Minister will join Plaid Cymru in celebrating our 75th anniversary later this year.
As a new Member, I have been fortunate: shortly after making my maiden speech I have been given this opportunity to round out some of my general descriptions of the constituency by discussing in more detail its economy and rural economy and the effect of Government policy in the rural economy. As the representative of a constituency that is part of the objective 1 area, I make a


small plea for essential changes to be made to the Government's approach to the economy in general. That status is a sign that our gross domestic product has fallen below 75 per cent. of the European average.
I acknowledge the Government's hard work in gaining objective 1 status for the area that I represent, but as many Members have said, we need it because the current state of our economy is nothing to be proud of. It is a sad testament to many years of under-investment in rural and urban Wales, although I acknowledge that the present Government are not responsible for a lot of that. Nevertheless, let us be clear that their hard work on objective 1 will come to nothing, as the right hon. Member for Llanelli (Mr. Davies) made clear, if the questions on match funding and additionality are not answered urgently. They are addressed in the Select Committee report and have been discussed across the Chamber today.
I want to concentrate on the wider economic trends that the Government are following. I hope that the Minister will think seriously about how the Welsh economy is performing and not paper over the problems with general comments about the United Kingdom economy. As my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd) made clear, parts of the UK economy are doing extremely well, but we have a problem in the rural economy and a general problem in the Welsh economy.
Let us remind ourselves that the area ranks as one of the most underdeveloped, underpaid and underskilled in Europe. Nothing is more crucial to my constituents and, I know, to many constituents of Labour Members, than for the Government to address the problems of regeneration—urban and rural—and to invest in a rural infrastructure that can deliver sustainable development. That is the true test: not whether we have objective 1 status, but what we do with the opportunity.
Let us look at the economic context. Unemployment is falling in my constituency and in many Members' constituencies, but the bald statistics mask a real crisis. The unemployment statistics are skewed by the amount of young people who are leaving my area and rural areas in general, and by the inward migration of older, retired people. The economy is low wage, with many tourism and agricultural jobs, which are seasonal and depend highly on general economic circumstances. People might have a job this week, but not the next. It is like that in many rural areas that I represent.
In particular, the strong pound is hitting both tourism and agriculture. The milk industry in Ceredigion—we need to put it on the record—is on its knees under the strength of the pound. The difference between sterling's current rate and that which would apply under convergence is worth 2p on a litre of milk. On an average Welsh quota for an average Welsh dairy farmer, that is about £15,000 a year. It is the difference between profit and loss, happiness and misery.
An additional factor in the make-up of Ceredigion is the high rate of self-employment. That again reflects the tourism and agriculture sectors, where small businesses dominate. It bodes well for a local "menter", or entrepreneurial approach to objective 1, but it does not bode well for attracting private sector match funding to rural areas as they do not have the large firms. There are no headquarters or large corporations there. On the split and share of objective 1 funding, it should not cluster

around the Sony corporations and M4 corridor, where it would be easy to get match funding. It has to be spread throughout the area, particularly rural Wales.
All that may suggest that Wales is the poor man of the UK and goes cap in hand to the Treasury for resources. I do not accept that. There are many hidden subsidies within the tax system. It is not a simple case of saying that the tax take from Wales is X, the amount of Government spending in total on Wales is Y, so Wales is poor and gets money from other areas of the UK. We have to have a much more sophisticated analysis, including in particular things such as the defence industry in south-east England and the hidden subsidies for investment and infrastructure building in the UK.

Mr. Denzil Davies: We are back on the defence industry. Dr. Phil Williams has been writing article after article about the lack of a defence industry in Wales. Does the hon. Gentleman not realise that that has nothing to do with it? The amount of public expenditure that comes in is £15 billion. The amount of taxation raised is £10 billion. On the Maastricht criteria, there is a gap of 15 per cent. of GDP—higher than in any other country in Europe, except Slovakia.

Mr. Thomas: I make three comments on that. First, where are the multinational headquarters of those companies? Where do they pay tax?

Mr. Denzil Davies: In Wales.

Mr. Thomas: I do not think so. Secondly, investment in infrastructure follows that sort of industry, which we do not have in Wales and rural Wales. Thirdly—I hope that the right hon. Gentleman is another Welsh socialist—there is nothing wrong with redistribution of income anyway, if that is the point that he wants.
We will have another debate at another time, but I argue that Wales is getting quite a raw deal from the Government. That is worsening under the Barnett formula. Consequential as it is, it makes things worse for Wales year after year. It started 20 years ago. We need a new, renegotiated formula. [Interruption.] There are nods and disagreements, but many Welsh electors are seeing it for themselves.
The evidence is there. Plaid Cymru won over 30 per cent. of the vote in the Assembly and European elections. We have heard a cogent argument from the hon. Member for Ogmore (Sir R. Powell) against any form of proportional representation and for entrenching the Labour party, even when it fails to win a majority in Wales.

Mr. Llew Smith: How does the Barnett formula make things worse for people in Wales? What statistics does the hon. Gentleman have to prove that point?

Mr. Thomas: I shall send the hon. Gentleman a copy of our detailed proposals.

Mr. Smith: I should like an answer now.

Mr. Thomas: I shall give the hon. Gentleman an answer. The Barnett formula is consequential on spending in English Departments and does not take into account the additionality of European money under objective 5b and


objective 2. We have not received the money that we should have had, as Barnett has blocked it. That is why the Barnett formula has failed Wales.
The right hon. Member for Llanelli referred to Merseyside having been allocated £1.2 million under objective 1. Wales deserves 38 per cent. of the objective 1 package for the United Kingdom, but if we apply Barnett we get only 6 per cent. The right hon. Gentleman should put those arguments to the Chancellor, as we are putting them to the people of Wales and receiving their support.

Mr. Llwyd: My hon. Friend should know that the Secretary of State recognises that and has agreed to take it up with his Cabinet colleagues.

Mr. Thomas: I shall press on and turn to the picture in Wales now. Notwithstanding the comments that I made about the Labour party's honourable history and tradition in Wales, that hegemony has now been broken and we have to work within a different pattern of Welsh politics. It has been shattered, and no party now has a majority in Wales. Hon. Members have criticised the work of the Welsh Assembly, but they must recognise that the new century has ushered in a new type of politics.
The first two years under this Government have proved something of a revelation for many people in Wales. The Welsh electorate did not expect new Labour to follow Conservative spending plans for the first two years. After attacking such spending plans when in opposition, the Government now have a lot of explaining to do to the people of Wales.

Mr. Jon Owen Jones: Leaving aside the merits or otherwise of following the Conservatives' budget plans for the first two years, does the hon. Gentleman accept that what he has just said is completely wrong, because when Labour fought the last election, we promised to do precisely that in order to overcome the huge debt that we inherited from the Tories? We told the electorate what we planned to do. Whether the hon. Gentleman agrees with it is another matter, but we told the electorate and they elected us.

Mr. Thomas: I said that the electorate did not expect new Labour to do that. It may have been promised, but the election was fought on the basis of change, and change did not come.
It is time to reveal the real reason for those policies and the comprehensive adoption by new Labour of the right-wing orthodoxy that says internal markets bring efficiency savings and deliver services better than the public sector. A lack of faith in the public sector and the idea that the free market can be a tool for combating social exclusion and delivering economic development in deprived areas is Thatcherism by another name.
We need a reality check here. It cannot be denied that what is being delivered in Wales now is a widening gap between the rich and the poor. It is there in the statistics and the hon. Member for Blaenau Gwent (Mr. Smith) knows it well. There is continuing under-investment in our schools and our health services and a total disregard for the current farming crisis.
New Labour's attitude to public expenditure betrays a shift to the right. For Labour pioneers, spending on public services was seen as an essential tool for achieving social justice. It could pay for comprehensive education, council housing and the national health service. Now, however, new Labour regards public expenditure with great suspicion. We do not share that view. New expenditure has been ruled out and existing expenditure has to yield greater value. Nurses spend less time with patients in the name of efficiency, and teachers spend more time on administration. They do not have the opportunity to provide care. Council tax rises burden the local electorate because of the squeeze on national public expenditure. There is a new orthodoxy—I should like the Minister to deny it—that public expenditure should not rise above 40 per cent. of gross domestic product. The Government have stuck absolutely to that orthodoxy. There is no rhyme or reason for it: it is an article of faith. Public expenditure as a percentage of GDP—[Interruption.] Other European countries have a higher ratio of public expenditure to GDP.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. May I tell the House that continued sedentary comment is extending speeches to the point that many, many hon. Members will be disappointed?

Mr. Thomas: Public expenditure as a percentage of GDP has fallen since new Labour took office, and the new Labour plan is to continue the trend until the next general election.
Let us consider some of the figures from the Conservative Government's last year in office. Although it pains me to say it, in that year, general Government expenditure was 40.4 per cent. of GDP. In the first year of the current Government, the figure fell below 40 per cent., to 39.4 per cent., and it is predicted to remain below 40 per cent. for the next two years. In 14 of the Tories' 18 years in office, public expenditure was about 40 per cent. of GDP. New Labour has promised and delivered a consistently lower level of public spending.
A particularly apposite question is where those figures leave the Prime Minister's promise to raise health spending as a proportion of GDP. Unless the overall threshold of public expenditure is raised above 40 per cent., his promise can be met only by taking away from other items in GDP. I hope that the Secretary of State and the Minister will work hard in government to break that closed circle, which does nothing to help the socially excluded or the poor and particularly disadvantages vulnerable children and pensioners.
In that context, and in the context of the problems that I see in my constituency, we have to remember that about half public expenditure is spent on individuals—on pensions, and on social security payments. Is it therefore any wonder that, as a new Member of Parliament, I am already deluged by complaints about disability living allowance being taken from people because of cash limits, not because of changes in their disability? Is it any wonder that the 75p pension increase is thought to be risible when, because of rural bank closures and cuts in rural services, people have to spend that much just to take a bus to a bank or a post office?
The amount of public expenditure devoted to those services demonstrates the extent to which a Government are prepared to redistribute wealth. Redistribution of


wealth is what it is about. It is perverse for any Government who talk about social equity to set themselves the target of reducing that part of public expenditure as a matter of principle, rather than as a consequence of economic development and the growth of opportunity.
Over the years, the overall 1 per cent. cut in public expenditure has amounted to about £9 billion per year—which is equal to the Welsh block grant. Any voter would be able to tell the Government how to spend that money: on the health service, education and the rural economy. In Wales, the consequence of the cut is that health, education, public transport and the rural economic infrastructure are still starved of the resources that they need. Is that really what people thought they were voting for in 1997?
Interest rate cuts are increasing the effect of the public expenditure cut. The Government, rather than increasing investment in public services, are allowing interest rates to rise. New Labour has bought all the Tory economic arguments. Consequently, the Welsh economy is being run on the guiding principles of low public expenditure, low income tax and low inflation. Interest rates are the only weapon being used to keep the economy on track and to combat economic overheating. The way the economy is being run is disadvantageous to many areas in Wales.
Wales is getting a raw deal from the Government. When the south-east of England sneezes, Wales catches the cold. Wales has a very bad cold at the moment.

Mr. Ted Rowlands: I should like to take the opportunity—it is the first that I have had—to congratulate the hon. Member for Ceredigion (Mr. Thomas) on his impressive victory in Ceredigion. I was fascinated by his observations. We saw in him a Jekyll and Hyde conflict—the socialist trying to reconcile himself with the nationalist. I tell him that they are not reconcilable, and his speech reflected that fact. When the socialist came out, he showed some conviction, but, when the nationalist came out, we saw that the two do not go together. He is also probably the only socialist on the Opposition Benches.

Mr. Öpik: I am.

Mr. Rowlands: I do not think that the hon. Gentleman is a socialist.
I hope that during this Parliament the hon. Member for Ceredigion reconciles the Jekyll and Hyde in him. I hope that we shall be able to convince him that the socialist path is the best, not the nationalist one.
The hon. Gentleman gave his first speech in a debate on Welsh affairs. This could be my last. I shall offer some advice to my right hon. Friend the Secretary of State on his post-devolution role. I understand and appreciate the role that he has had to play in recent months, acting as a go-between, trying to reconcile some of the problems that have broken out in Cardiff. I hope that that will not become the most significant part of his role. It is important to have a first-class, co-operative working relationship between Westminster and the National Assembly for Wales, but I hope that he will not see that as his central role.
One of my right hon. Friend the Prime Minister's favourite phrases is that we must not forget the big picture. I hope that my right hon. Friend the Secretary of State will look at the big picture in Wales and play his role in Whitehall and Westminster to ensure that the needs and wishes of the people whom we represent are met.
The hon. Member for Ceredigion was right to point to the importance of public expenditure as an instrument of redistribution. It is one of the few left in the hands of the Government. However, I am astonished that his party intends to try to reconcile a policy of spending a greater proportion of GDP on public expenditure with a commitment to join economic and monetary union, accepting all the criteria and the straitjacket and imprisonment on public expenditure that go with that. I shall be interested to see how his party does that. I am baffled by the view that it would be a blow for freedom for the Welsh people to escape from some imperial British control only to become a prisoner of imperial European control. I believe that we should be governed as a part of Britain, but retain our distinctive policies and attitudes.
The first aspect of the big picture is public expenditure. My right hon. Friend the Member for Llanelli (Mr. Davies) pointed out that the £8 billion block grant represents only just over half of the total public expenditure in Wales. The other £7 billion that comes into Wales is outside the competence of the Assembly. More than £5 billion of that is accounted for by the social security budget. Marginal changes in overall totals of social security expenditure can have a disproportionate effect on our communities. My right hon. Friend the Secretary of State should spend some time ensuring that social security expenditure is shaped to meet the needs of our communities as well as those of the United Kingdom as a whole.
The other major area of public expenditure outside the control of the Assembly is £780 million of law and order and public protection spending. Those huge sums paid into Wales are spent on matters of considerable concern. I am glad that the Select Committee on Welsh Affairs has decided to deal with social exclusion. It will take evidence from Social Security Ministers because we recognise that they play an important role.
In last year's public expenditure budget, £116 million was spent on industry, employment and energy. Again, that was outside the budget of the National Assembly for Wales. Is that money achieving its purpose in Wales? Is there a role that my right hon. Friend can play in ensuring that that expenditure is geared to the needs of our nation?
The most important part of the big picture is employment and jobs. If one examines the instruments and expenditure available to Ministers to promote training and jobs in our communities, a large proportion of budgets and programmes are outside the competence of the Assembly. The work of the Chancellor of the Exchequer, which my right hon. Friend has passionately supported, on family tax credit, employment zones, and the new deal and its extension to the over-25s—all underpinned by the national minimum wage—is playing a major part in breaking through the fatalism and resignation to a life not on the dole but on benefit that has grown up in our communities over the past 18 to 20 years. That was not a society that we wanted to create but it is one that we have to tackle. The speech of the hon.


Member for Ceredigion was hopelessly over the top. The Government have done an enormous amount to address fatalism and resignation.
While I agree with the emphasis placed on developing entrepreneurial spirit and indigenous employment, in my area the majority of new job opportunities come from inward investment. Anyone who turns their back on inward investment is foolish. Fortunately, there are two projects in the pipeline in my constituency. One involves the St. Mary Meat Company from Cornwall; the other is One2One. Both will create an important number of jobs. Inward investment alongside the Chancellor's welfare-to-work programmes is vital to our needs and our future—United Kingdom policies working in and for Wales in every sense.
I hope that my right hon. Friend the Secretary of State will say a cautionary word to the Chancellor about the curious, superficial Treasury view that has emerged in the last few days of the mismatch between 1 million or more job vacancies and unemployment. We must not become bedazzled, as though just tapping those vacancies will solve unemployment. Because there has been so much interest in that claimed level of job vacancies, I checked on job vacancies in Merthyr yesterday and the day before. I hasten to add that I am not looking for a job myself but wanted to check what was available.
Sadly, I found that most of the 115 vacancies available in the past 24 hours were for cooks, cleaners, bar staff, bouncers and security officers. There were also vacancies for a butcher and bailiff, a few mechanics, a hairdresser and sales staff. All those jobs are useful and will supplement incomes in some cases, but many are part-time and some are temporary. Together, they do not add up to the stuff of a major new initiative in the communities I represent.
More interesting was what my analysis of the job vacancies available at the Merthyr jobcentre revealed about the nature of our economy and the valley economy catch-22 situation. The range of jobs available at our jobcentre, apart from those with the major inward investors, do not create or offer the skills and training opportunities that conventional wisdom says is a basis for the modern economy. Those job vacancies will not create the skilled training opportunities that we think are crucial to a 21st century economy. The catch-22 is that as we do not have the job vacancies to create the NVQ 3s and 4s that we are so short of, we do not have the training opportunities. Training means work-based training, so the employment must create the NVQ 3s and 4s that I am told are essential to a 21st century economy.
How are we to address this crucial requirement in communities such as mine? If I accept the conventional wisdom that we have to train and reskill people to higher levels to meet the needs of a 21st century economy and attract new inward investors looking for higher levels of skills and training, how will we do so in this catch-22 situation? That is where objective 1 should come in; it is what objective 1 should be focusing on. As has been said, we spend so much time arguing about match funding that we have not talked much about what we will do with the money. What can we do with it to turn our economy around? If skills and training are vital, let us have a national training programme. I am not talking about a partnership here or a group there, but a programme that

goes right across the board—a nationwide Welsh training programme. It should not be buried in competing projects within a partnership in this or that area of Wales; it should be a national programme with a national view.
I have not read in great detail how the Irish transformed their economy with objective 1 money, but what I have read shows that it was not a bottom-up process. It was very much a top-down process—the Irish Government decided that their population's fundamental failing was that it was not well educated, well trained or efficient enough to meet the country's needs.

Mr. Simon Thomas: Will the hon. Gentleman accept from me that the outline of the jobs available in the jobcentre in his area also applies to rural areas of Wales? Will he also accept that Ireland spent more than 38 per cent. of objective 1 money not on infrastructure but on skills training?

Mr. Rowlands: I am glad that the hon. Gentleman has confirmed my impression. In that case, how do we ensure that we do the same in Wales?

Mr. Paterson: Will the hon. Gentleman give way?

Mr. Rowlands: No, I want to deal with this point, and many other hon. Members want to speak.
We cannot afford to let the objective 1 money be dissipated and chopped up into little pieces to filter into the economy. We have to have a national programme. The Employment Service provides a national instrument for delivering that service. The Employment Service in Wales has been transformed since 1997 by the Government's new deal proposals. It has been transformed in spirit, character and personnel. It is extremely proactive—it may not be in Ceredigion, but it is in my area. It has changed from the old dole and benefit mentality to a proactive, exciting service. We should build on that experience and use objective 1 money for the Employment Service.
I am sorry that the right hon. Member for Caernarfon (Mr. Wigley) is not here, because I can even tell him where we can get the match funding from. It does not involve the comprehensive spending review, help from the Treasury or raising taxes. The money already exists in the windfall tax fund, a curious and separate fund which we occasionally ignore. The fund, which falls outside the comprehensive spending review, contains more than £1 billion, £570 million of which is unallocated. If the Employment Service and my right hon. Friend the Secretary of State for Wales, backed by the National Assembly, produced a first-class national training and skills programme, match funding could be found from the windfall tax fund. We need not raise the money, merely allocate it.
I have watched with fascination as my right hon. Friend the Secretary of State for Education and Employment has raided the fund for interesting uses. I would like to raid it for Wales, and I want the Secretary of State to propose that we do so. The European Union could not possibly deny that that would be matched funding, and neither could it deny our objective because training lies at the heart of most EU programmes.
Why are we arguing when the money is available? We share an objective, and we should go out and achieve it instead of spending our time in debate. I hope that


during his stewardship my right hon. Friend will raise his sights and his horizons to help to ensure that under objective 1 we can over the next five years transform the Welsh economy into a modern, efficient 21st century economy capable of and willing to meet the needs of all our people.

Mr. Owen Paterson: Having had the honour over the past year to serve on the Select Committee on Welsh Affairs and on the Welsh Grand Committee, it is a pleasure to be called to speak in the debate. I pay tribute to my neighbour, the hon. Member for Clwyd, South (Mr. Jones), who chairs the Welsh Affairs Committee fairly, although he may find my views on devolution poisonous. I pay tribute, too, to the Secretary of State, who kindly allowed me to visit him with the hon. Member for Montgomeryshire (Mr. Öpik) to discuss the anomalous problem of the A483, a Welsh trunk road that passes through my constituency. I should be grateful if the Secretary of State would pay that problem some attention during the coming months, because it has not gone away, and careful liaison is required with his other British colleagues in the Cabinet when he discusses it with them as the representative of Wales.
It is a great shame that we did not hear from the right hon. Member for Llanelli (Mr. Davies) on the relationship between the Welsh Assembly and Westminster.

Mr. Öpik: I apologise to the hon. Gentleman for interrupting his speech so early. Does he agree that, unless the serious trunk road problem is addressed, Wales will remain without a proper north-south road connection?

Mr. Paterson: The hon. Gentleman—my neighbour—is absolutely right.
I should like to make one point about the speech of the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). I went last year to Ireland with the Welsh Affairs Committee. It is most important that hon. Members—particularly those from Plaid Cymru—should understand that the head of the Irish Development Agency said emphatically that the key to reviving Ireland's economy was not grants. Grants were welcome, he said, and they represented 5 per cent. of Irish gross domestic product.

Mr. Llwyd: Corporation tax made the difference. The hon. Gentleman need not tell me that; I know it already.

Mr. Paterson: Exactly so. Corporation tax was at 10 per cent., and it has been fixed at 12 per cent. until 2026. The idea that Ireland was turned round by grants is a fundamental misunderstanding. The improvement came from highly favourable corporation tax.
As a devo-sceptic—one who did not want devolution—I know that the part of Wales that I know best, the north-east, did not support devolution during the campaign. It is worth remembering that devolution went through on a majority of 168 votes per constituency. Real scepticism remains about it. It is not good enough to say that we have had the result and should forget about it. Whenever I speak to people who come from Wales to Oswestry market or wherever, I hear real doubt about the merits of the exercise.
The ICM poll has confirmed that. Some 40 per cent. said that the Assembly had achieved only a little, and 48 per cent. that it had achieved nothing at all. The Government tempt hubris in both Cardiff and London by discussing the spending of large sums of public money on new buildings. The project is not proven yet. We were told, as my hon. Friend the Member for Ribble Valley (Mr. Evans) said, that the new building would cost £17 million. As recently as 19 January, the then First Secretary—the right hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael)—told us that it would cost £22.8 million. We are now told that the cost could creep up to between £26 million and £30 million. It is tempting hubris to spend such an amount, when money is needed for public services.
The Welsh Office has spent £5.2 million since May 1997 on publicity alone. The Government must be careful about spending such large amounts when in health—a public service that is much in the public eye—9,422 more people are on waiting lists than in 1997; the number of patients waiting more than 12 months for treatment has increased by 3,776; and 3,743 people have been waiting more than 18 months. That is where the majority of the Welsh population would like that money to be spent.
Several Members have mentioned post offices. I shall not go into detail, but post offices are critical in rural areas. There are 1,500 post offices in Wales but the National Federation of Sub-Postmasters predicts that, if the ACT reforms go through, the number could drop to 750. That would have a dramatic impact in rural areas.
Another element of Government activity has caused real damage. We hear much talk of competitiveness, but in the teeth of that there is an extraordinary increase in transport costs. We have the most expensive diesel and petrol in western Europe; 85 per cent. of the cost of fuel goes to the Government in tax. We are heading well north of a £3.50 gallon to a £4 gallon. That was never predicted when the Government came to power.
In rural areas of Wales, 98 to 99 per cent. of goods are carried by diesel-powered lorry. Between 70 and 80 per cent. of people in rural areas drive to work. As was pointed out, the car is the last thing that a working family can afford to lose. Those people are faced with substantial increases. The AA reckons that the cost of running an average car is £900 a year. That does not make rural Wales more competitive; it damages businesses.

Mr. Ruane: Will the hon. Gentleman remind the House who introduced the fuel escalator?

Mr. Paterson: The Pavlovs would have been delighted if their dogs had reacted so predictably. That is what Labour Members always say. The fuel escalator began at 3 per cent. The previous Conservative Government increased it to 5 per cent., but this Labour Government have increased it to more than 6 per cent. If the hon. Gentleman reads table B9 on page 154 of the "Pre-Budget Report", he will see that the fuel duty take is to increase over the next three years.
The Secretary of State must tell his colleague, the Chancellor, that increases in fuel duties do real damage to the rural economy.

Dr. Julian Lewis: I apologise for intervening so early in my hon. Friend's speech. Is not the argument that was


made to him rather like saying that, just because someone invented income tax, that person is to blame when other people increase it by vast amounts?

Mr. Paterson: That is right.

Several hon. Members: rose—

Mr. Paterson: Other Members want to speak, so I shall push on.
Recently, the Agriculture and Rural Development Secretary of the Welsh Assembly visited a farm not far from Oswestry, while I was visiting Oswestry market. The farm had 180 cows and 600 sheep, but the farmer was on income support. That is terrible.
The Secretary of State is a fair man, but I did not think that the cursory attention in his speech to the problems of agriculture was good enough. He touched on the matter, but he did not cover the depth of the crisis. An article in this week's Farmers Guardian referred to another visit by the Welsh Agriculture Secretary to a farm—a family farm that had been going for 400 years, but may close by the end of the year. It is a good mixed farm—dairy and sheep.
There is a dramatic crisis. Farm incomes have been slashed. The National Farmers Union in Wales reckons that some hill farmers are earning as little as £15 a week. Between 1997–98 and 1998–99, dairy farm incomes fell
By
37.5 per cent. Incomes from cattle and sheep fell by 75 per cent. Those figures are dreadful. Unemployment is rising. About 2,000 jobs were lost in Welsh farming between 1998 and 1999.
It is not usual to mention suicides without paying due care to the circumstances. However, in 1997 there were eight recorded suicides of Welsh farmers; there were nine in 1998. The problem is growing worse. A study carried out by PhD students at Swansea university showed that a combination of social and economic factors was driving many Welsh farmers to feel suicidal. The position is desperate, but the problems are resolvable. Farming should not be seen as a problem, because many of its difficulties come from government agencies. I admit that they did not all happen at once, but this Government have placed extra costs on farming.
I was involved in the consideration of the Food Standards Act 1999, so someone from an abattoir in north Wales wrote to me. Before 1999, its total Meat Hygiene Service costs were £596.73 a week, but from April this year they will be £2,602. Another abattoir in mid-Wales wrote to me: its costs have risen from £300 to £17,000 a year in inspection charges, and are £180 a tonne compared to £1 a tonne in a large commercial plant. Small abattoirs are vital if we are to maintain the quality of Welsh meat and use its production as the basis for future prosperity. We shall not be able to market meat without working with such small businesses.
The Government have been extraordinarily slow to react to many of the recommendations in the Pooley report, which they themselves commissioned. The Secretary of State should push his colleagues in the Ministry of Agriculture, Fisheries and Food to put reforms into action.
The Government could lift other costs that are imposed only in this country. Why are we the only country that insists on taking the spine out of sheep aged over 12 months? Why do we have a crisis in the calves scheme? It is traumatic for Welsh farmers to bring into the world male dairy calves only for them to have to shoot them on the spot and send the meat to hunt kennels. That is going on. The market in France sells calves for £150 each and it would make a large difference to dairy farming in Wales if that market could be opened up.
The dairy industry needs efficient production. Our dairy products cost twice as much as those on the continent. The break-up of Milk Marque has not helped, and I ask Ministers to consider what has happened to Eden Vale and Dairy Crest in the past week. It is not good enough to victimise Milk Marque and to put it in a difficult position where it cannot get production, and not to pay attention to what other producers do.
In summary, let me say there is a large contrast between what the Government spend on their agencies, publicity and services, which are not being delivered, and the devastating crisis in rural Wales.

Mr. Jon Owen Jones: I would like to follow the comments of the hon. Member for North Shropshire (Mr. Paterson) on agriculture, but unfortunately time does not permit me to do that. We have had an interesting debate, and it is regrettable that many of my hon. Friends will not be able to contribute.
During the past few years, Wales has seen a period of great political change, if not turmoil. It is understandable that there should now be a call for a period of consolidation around the new constitutional settlement. Indeed, my right hon. Friend the Secretary of State has today and on other occasions referred to a need for stability. Other Members have also done that in the debate. Stability would enable the Welsh Assembly to begin to use its powers and its budget for the better provision of essential services, such as health and education, for the people of Wales.
In the Assembly's work, there will be from time to time a call for new powers that will require primary legislation. In the debates on the Government of Wales Act 1998, it was always envisaged that that would be so. Indeed, an important part of Ministers' work is to enable the view of the Assembly and the people of Wales to be incorporated into legislation that comes before the House. How exactly that will work in practice, as well as in theory, we are about to discover over the next few years.

Ms Julie Morgan: Does my hon. Friend agree that the unique way that we shall first see that operating is through the appointment of the children's commissioner for Wales? People and voluntary bodies in Wales, as well as the Welsh Assembly, have a unique idea about how the commissioner should work and should be appointed. It is a test case, and the Secretary of State's announcement today shows that the wishes of the Assembly and the people of Wales are being followed.

Mr. Jones: My hon. Friend anticipates my comments. That was one of the examples that I had intended to use.
I shall discuss another example first, not because I think it is more important, but because it is very topical. In another place yesterday Lord Roberts called for a Welsh


bank holiday on St. David's day. That is a very popular request, with which many of us, though perhaps not all, would wish to be associated. In order for us to have that bank holiday, the Welsh Assembly would need to implement it, but this House would need to sanction it.
Another example, which my hon. Friend has just given, is the desire to have a children's commissioner appointed in Wales. There is a very strong call for a similar commissioner to be appointed in England. But those commissioners might not have exactly the same sort of roles. In any case, we in this place might not want a commissioner to be appointed in England. If Wales desired the appointment of a children's commissioner, but one was not to be appointed in England, what legislative vehicle would be required to set up that post?
Those are two very recent examples. I am not sure that they are the best examples, but they are the most recent, of a trend that will grow. The Welsh Assembly will consider how it can best deliver services, and from time to time it will call upon this place to enact legislation so that it can do its work.

Mr. Rogers: Will my hon. Friend give way?

Mr. Jones: I will not, because my hon. Friend spoke at length and I do not have much time.
How will Parliament deal with those requests? Some issues may be conveniently tagged on to forthcoming Bills; others may not he dealt with so easily. If matters are uncontentious and have cross-party support, there should be little difficulty in bringing the legislation forward. But what if the issues are contentious? How often will calls for new legislation come before the House, and how can they be dealt with? As I see it, there are four options.
First, we fit the legislation in as best we can under the processes that we now use. However, the present procedures in the House mean that a Government are very reluctant to bring in further legislation or make significant amendments to existing legislation—and even where there are consensual issues, with cross-party support, we have seen only this week and in the week before the half-term recess how a few malcontents can keep the House up all night and endanger Government business.
Therefore, it is not surprising that, with the best will in the world and the utmost sympathy, a Government would be reluctant to bring forward legislation which it might regard as marginal and which might endanger the time required to proceed with their own legislation. Would a Government be prepared to risk losing valuable parliamentary time to pass a purely Welsh Bill or a purely Welsh amendment?
A second option is to reform the House so that Bills could be routinely timetabled. I am sure that there are several reasons why that would be desired by some hon. Members, including new hon. Members, for its own sake. It would be a way in which we could deal better with the demands that would be put upon the House by the Welsh Assembly.
A third option is to introduce some sort of fast-track procedure, following an agreed process with the Welsh Assembly, so that Welsh matters can be dealt with more expeditiously and not cause the difficulties that might otherwise arise. There is a fourth option: we could empower the Welsh Assembly to deal with these matters on its own.
Over the past two months, there has been considerable public disquiet about council allowances paid in Cardiff, which far exceed the levels recommended by the Assembly to local authorities. Indeed, they exceed the rate recommended by the Assembly to the Local Government Association in Wales by more than 300 per cent. They are also far higher than any allowances that have been paid to any councils in England. This appears to be a peculiarly Welsh problem; but, although the Welsh Assembly is responsible for overseeing local authorities in Wales, as far as I know it has no ability to band or otherwise set limits on council allowances. This place, which is responsible for English authorities, can always take on itself the power to deal with problems if they arise. Perhaps it is the Assembly's lack of power to match its responsibility that has led to the current unique situation in Wales.
The House of Lords recently debated the Local Government Bill. That Bill, which we could amend, might provide a convenient vehicle for the Assembly to exercise sensible limits on the allowances given to councillors in Wales. I urge my hon. Friends to ensure that a Government amendment is tabled, before the House of Commons debates the Bill, conferring such powers on the Assembly. If the present procedures prove inadequate to deal with practical issues—I have given a number of examples—we shall not see the stability that the Secretary of State rightly wishes to see.

Mr. Robert Walter: We have had a good debate, although it has been squeezed by a number of statements which have prevented some hon. Members from speaking. Those who have spoken have, I think, led us to the conclusion that neither side of the House has been overwhelmed by satisfaction with Government policies in Wales, or by what has been achieved by the Labour Administration in the Assembly.
I believe, however, that Members in all parts of the House agree about matters concerning the Waterhouse report. We welcome the report, which has been discussed here on other occasions. It is a tragic tale of child abuse, and, as I have said before, I have considerable admiration for those who were involved in compiling it. I had a similar experience, although not as harrowing as the experience of the people who compiled this report, when as a member of the Select Committee on Health I dealt with people who had been victims of abuse as child migrants in the 1950s and 1960s. Conservative Members welcome the statement made by the Secretary of State today about the establishment of a children's commissioner.

Mr. Öpik: Does the hon. Gentleman agree that the commissioner and his or her "civil service" must exercise such probity that children can trust the process? An awful lot of damage has been done to the very people who need to use this service, and it is the only way in which we can get to the heart of whatever paedophilia is going on in Wales and has not been discovered.

Mr. Walter: Trust is a very important part of the process, and we must have genuinely independent people who children can trust and to whom they can speak in confidence.


We have had a fascinating debate. We have seen that there is dissatisfaction with Labour as a Government at Westminster and as an Administration in Cardiff. My hon. Friend the Member for Ribble Valley (Mr. Evans) responded very well to the Secretary of State's opening speech, and Conservative Members will continue to express our dissatisfaction with Labour's treatment of Wales at Westminster and in Cardiff.
It is no understatement to say that Labour is all mouth and no delivery in Wales. Many promises have been made by the Government in Westminster and the Labour Administration in Cardiff, but they have failed to deliver. The Prime Minister, the Secretary of State and the First Secretary are failing to deliver for the people of Wales. This year, council tax payers in Wales will experience massive increases in their bills. In many areas, a large percentage of the increase will go on bailing out wasteful Labour and Plaid Cymru-run councils. The Labour Executive in the Assembly are failing to deliver on the priorities of the Welsh people. All they have done is waste taxpayers' money on a completely unnecessary new Assembly building.

Mr. Flynn: Before the hon. Gentleman gets into his political rant, will he answer a serious question? Is he happy that the Labour Government have delivered on proportional representation by ensuring that in the National Assembly elections, the proportion of Conservative candidates elected was roughly equal to the number of votes that the Conservatives had in Wales, or was he happy with the 1997 general election result, when 20 per cent. of the population of Wales voted Conservative, but the party did not have a single one of the 40 Welsh Members of Parliament?

Mr. Walter: I do not want to get drawn into a debate about the merits of proportional representation. All I will say is that if one is looking for a declaration of popular support, the Conservative candidate in Ceredigion did somewhat better than the Labour candidate.
Labour has also failed to ensure that Wales receives its funding from the European Union. The Prime Minister said:
We do not intend to let the people of Wales down.—[Official Report, 20 October 1999; Vol. 336, c. 439.]
Yet now Labour is refusing to give a commitment to secure the extra funding that Wales needs.

Mr. Rogers: The hon. Gentleman ought to be fair. I spent five years in the European Parliament, and the problem of additionality in member states supporting European funding existed some years ago, right through the period of the Tory Government. When local authorities in Wales submitted schemes, they always ran up against the problem that the Government would not support European funding to the extent that they desired.

Mr. Walter: Under previous Governments, the funding was provided. I shall come to the specifics of this case in a moment, but the Secretary of State and the Chancellor have made no commitment to provide that extra £1.2 billion.
Labour is failing to deliver on agriculture in Wales, and is totally insensitive to the needs of the industry. It has already been mentioned that the net income of dairy and livestock farms in Wales is forecast to fall by 25 per cent. in the current financial year to an average of £4,500 per farm.
I shall deal briefly with local government spending. Under Labour, council tax bills in Wales are set for a massive rise. They will increase by more than 18 per cent. in Monmouthshire and by 14 per cent. in Swansea. Many of the increases are due to the fact that the Labour Administration in Cardiff is using the council tax reduction scheme to subsidise profligate councils.
The previous Government introduced the scheme as a temporary measure to deal with the problems of changing from a two-tier to a unitary system of local government. The scheme is now being used to cover the wasteful spending of four Labour and Plaid Cymru councils. Council tax payers in areas such as Monmouthshire will be forced to pay for the overspending of councils in Neath Port Talbot, Rhondda Cynon Taff, Merthyr Tydfil and Blaenau Gwent.
My hon. Friend the Member for Ribble Valley mentioned some of the figures. In Anglesey, council tax bills will rise by 16.5 per cent., in Powys by 13.8 per cent. and in Monmouthshire by 18.2 per cent.—an average rise across Wales of 10.5 per cent.
The Assembly is failing to deliver. According to a recent ICM poll, 88 per cent. of Welsh people feel that devolution has achieved little or nothing. Instead of delivering on the real issues for the people of Wales, the Assembly has concentrated on seeking higher allowances for Assembly Members and securing the new building for the Assembly.
The First Secretary recently announced that the total cost of the new building would be £22.8 million, but in reality it is likely to be at least £26 million and possibly nearer £30 million. The people in Wales do not want to see so much money being spent on a new Assembly building. They would prefer their money to be spent on real priorities, such as education. The hon. Member for Rhondda (Mr. Rogers) was delightfully off-message. He referred to education spending and the expenditure necessary to repair leaking school roofs and to provide new school lavatories, and he compared that with the spending on the Assembly building.
There is utter confusion about ensuring that Wales receives the funding promised by the Prime Minister and the European Union. On objective 1 funding, the Prime Minister said:
We do not intend to let the people of Wales down.—[Official Report, 20 October 1999; Vol. 336, c. 439.]
However, as was mentioned in the debate, the Select Committee on Welsh Affairs has criticised the Government's approach to objective 1, stating that
the Government's "trust us" approach is not enough. There is a real risk that the continued uncertainty is deterring people, particularly in the private sector, from investing in developing projects.
It is another case of Labour being all mouth and no delivery. The Prime Minister has promised the earth, but he will not make the commitment to give Wales the funding that it needs.
In appendix 8 to the Select Committee report, table 3.2 shows clearly that over the seven years of the programme, the total national contribution from public expenditure is


£885 million, of which £152.8 million is supposed to come in 2000 and £132 million in 2001, yet the Secretary of State has told us on numerous occasions that he has secured no extra funding to date from the Treasury in respect of that contribution.
Furthermore, in a parliamentary answer to me, the Secretary of State stated that there would be no increase in the departmental expenditure limit of the Wales Office in the current financial year or the next financial year. Even if the extra money was available, it would have to be spent within the existing departmental expenditure limit. I was intrigued by an intervention by the right hon. Member for Caernarfon (Mr. Wigley), who had worked that out. He said that if there was no increase in the departmental expenditure limit, any money that the Treasury was willing to make available could be spent only at the expense of other programmes in Wales. The right hon. Gentleman did not receive the answer that he sought. I shall be interested to hear the answer in the Minister's winding-up speech.
The Labour party is also letting down the people of Wales on the health service. It is failing to deliver on its waiting list pledge in Wales, where out-patient figures continue to increase. In March 1997, 28,401 people were on a waiting list for more than three months for their first out-patient appointment. That figure almost trebled; it was 75,386 for the month ending on 31 January 2000—an increase of more than 165 per cent., which is well above the appalling 100 per cent. rise throughout the United Kingdom for the equivalent period.
In-patient waiting lists have increased in Wales from 66,609 in 1997 to 77,031 in January 2000, despite the Government's waiting list initiative. Overall, the number of people on all waiting lists has risen by more than 60,000 in Wales. The Labour party is failing the health service in Wales, as it is failing in every other area. Labour cannot be trusted in Wales. The Prime Minister's pledge not to let Wales down is empty and the House will realise that in the coming months.

The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): I welcome the first St. David's day debate since devolution and, indeed, the first of the millennium. I welcome the hon. Member for Ceredigion (Mr. Thomas) to his first St. David's day debate. He made a thoughtful contribution, and I look forward to seeing him return to his socialist roots and joining the Labour party.
The debate has emphasised the importance of set-piece Welsh debates, which examine the Government's role now and in the future. Today we had an opportunity to discuss the important issues that my right hon. Friend the Secretary of State covered: delivery, partnership and stability. Hon. Members from all parties have talked about a range of issues that reflect those themes, sometimes from different perspectives. The comments of my hon. Friend the Member for Rhondda (Mr. Rogers) did not chime with party policy but we welcome different perspectives, and we shall reflect on them.

Mr. Rogers: I criticised not Labour party policies or achievements in Wales, but the structure in which the Labour party has to operate in government in Wales.

Mr. Hanson: I welcome my hon. Friend's comments because they add to the flavour of the debate and to today's

valuable discussions. The comments that have been made from all parts of the House are the meat and drink of day-to-day discussions in the Wales Office, which has changed since our last debate, but has retained its significant impact on Welsh issues and the role of the House.
Hon. Members have raised issues that we tackle daily in Cabinet Committees in discussions that affect Wales and through our contacts with organisations, businesses, the voluntary sector, trade unions and others, and in Government correspondence with colleagues and Assembly Members. The anxieties that have been expressed today have reflected those discussions.
Twelve contributions were made to the debate and they covered a range of important issues. I shall try to deal with them all, but if I cannot, I shall write to hon. Members who contributed to the debate to give a flavour of our view on those matters.
All the issues are important, but I particularly want to mention rural affairs. The hon. Members for North Shropshire (Mr. Paterson), for Meirionnydd Nant Conwy (Mr. Llwyd), for Brecon and Radnorshire (Mr. Livsey) and for Ceredigion (Mr. Thomas) mentioned rural Wales. Delyn, my constituency, is rural, and Labour Members represent constituencies containing significant rural areas. We recognise that there has been a crisis over the past few years and that there are issues that need to be addressed. For example, the Government have given extra support through additional hill livestock compensatory allowance schemes in recent years and are considering a range of proposals such as rural rate relief to provide help. Measures such as the working families tax credit, the minimum wage and child benefit also have an impact on rural areas. I acknowledge that they are experiencing difficult times, but we are giving a great deal of support.

Mr. Livsey: Will the Minister use his best endeavours to get agrimonetary compensation for farmers in Wales, who are owed about £45 million as a result of prices not being achieved over the past 12 months?

Mr. Hanson: The hon. Gentleman will be aware that the Government have already given agrimonetary compensation to farmers in Wales and the rest of the United Kingdom. Further compensation is an issue, but the Fontainebleau agreement is in place and that will involve additional taxpayers' money for farming communities. We are concerned about rural areas and acknowledge those issues.
Objective 1 funding is another major theme. It was referred to by my right hon. Friend the Member for Llanelli (Mr. Davies) and other colleagues, including Opposition Front Benchers. All Members know, because my right hon. Friend the Secretary of State has said so on a number of occasions, that public expenditure survey cover and match funding are being examined by the Government in the spending review. I recognise why Members raise those important issues, but I refer to remarks made yesterday by Hugh Richards, the president of the National Farmers Union in Wales:
We have heard much about match funding for Objective 1 structural funds in the past few weeks but we must make progress.
It is important that
the right projects are proposed and backed to create sustainability for Welsh agriculture.


We should focus on that.
We have had our debate and people should recognise that the Government are not complacent—we secured objective 1 funding. Match funding and PES cover are important. The hon. Member for North Dorset (Mr. Walter) complained about a lack of match funding commitments. However, the right hon. Member for Wells (Mr. Heathcoat—Amory), the shadow Chief Secretary, does not believe in objective 1 money or structural funds in the first place, so that complaint was slightly hypocritical.
The other key issue is the devolution settlement generally and the hon. Member for North Shropshire, my hon. Friends the Members for Ogmore (Sir R. Powell) and for Rhondda. the hon. Member for Brecon and Radnorshire and my hon. Friend the Member for Cardiff, Central (Mr. Jones) all made important points about the way in which it is working in Wales. It is less than nine months since the advent of devolution on 1 July 1999. It represents a major structural change in the governance of Wales and the way in which Members of the House and others relate to it. I say to my hon. Friends and other Members, let us see how it operates and consider how it is developing from all angles. Most of all, let us make it work and make it stable. We have to consolidate and work with what we have at the moment.
Delivery of services, stability, partnership and the themes discussed by my right hon. Friend the Secretary of State are extremely important and we want to emphasise them. However, I remind the House that we must not forget the big picture, which was mentioned by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), and what the Government can do and have done to help to transform Wales. My hon. Friend the Member for Ogmore asked for a detailed statement of what the Government have done to help to support the people of Wales. I can tell him without fear of contradiction that we have had a busy and productive time since the general election. A lot has been achieved for Wales and there is a lot more to follow. I say to my right hon. and hon. Friends that the hon. Members for North Dorset and for Ribble Valley (Mr. Evans) and every other Conservative Member who participated in the debate have opposed every single thing done by the Government since the election.
We have talked about the economy and employment. As has been mentioned, the new deal has transformed the lives of many individuals in my constituency and others throughout Wales. In Wales, 12,000 young people, 2,000 long-term unemployed and lone parents have secured jobs through the new deal. It has transformed people's lives in Wales, which the Conservative party has opposed. At the end of last year, I attended the new deal launch for the over-50s in north Wales, the launch of the new deal for musicians in Cardiff, and the ONE launch in Cwmbran in the constituency of the Secretary of State in November, all of which are transforming people's lives. An additional 46,000 people are in work in Wales since the general election.

Mr. Paterson: Is the Minister aware that one calculation has it that each job, unsubsidised in the real market, costs £23,544?

Mr. Hanson: The hon. Gentleman has voted against the new deal and does not support it, but it is transforming lives. Colleagues who represent seats in Wales know that to be a fact.
The hon. Member for Meirionnydd Nant Conwy mentioned tackling poverty and social exclusion, as have others. The working families tax credit has meant that 87,000 Welsh families have had an increase of £24 a week. I and my hon. Friend the Member for Vale of Clwyd (Mr. Ruane) launched the initiative in his constituency in November.
A total of 585,000 pensioners have benefited from the winter fuel allowance. In November, the first pensioner in Wales received the cheque from me on behalf of the Wales Office in Bangor. About 109,000 people have benefited from the minimum wage in Wales.
I know that the right hon. Member for Kensington and Chelsea (Mr. Portillo), who is now gracing the debate, is a convert to the minimum wage, but the Conservative party voted against it. The predecessor of my hon. Friend the Member for Merthyr Tydfil and Rhymney, Keir Hardie, would have been proud of our party and its achievements in Wales. When we look at free television licences for pensioners, the massive increase in child benefit and our targets to tackle child poverty in Wales, as in the rest of the UK, we realise that the Government are delivering for Wales.
My hon. Friend the Member for Merthyr Tydfil and Rhymney said that crime was an important issue. Police numbers are up in every police force in Wales since the general election because of the Government's assistance and help. Three police forces out of four have shown a fall in recorded crime from the highest ever levels, recorded under the Conservative Government.
The hon. Member for North Dorset criticised the Labour Government's achievements on health in Wales. He should be aware that, in partnership with the Assembly for Wales, this year the NHS in Wales will receive an additional £175 million worth of expenditure and has an additional £1 billion to spend over the next three years. In the first two years of the Labour Government, 11,000 more in-patients were treated than in the last two years of the Conservative Government.
The Labour Government has given an extra £844 million for the Assembly to spend on education over and above current plans. The money is transforming the lives of children throughout Wales, building new class rooms, putting new teachers in place and giving new skills. The Labour Government are achieving for Wales. All the points that hon. Members have made are important and valid.
We have made a difference to people in Wales. It is about delivery on those issues, making a change, transforming people's lives, and partnership with the Assembly to achieve that. The Queen's Speech included a range of legislative opportunities: the Local Government Bill, the Care Standards Bill and the Learning and Skills Bill, which all give opportunities to let the Assembly look at those things in a Welsh context. I am particularly pleased to welcome the Secretary of State's announcement about the independent children's commissioner for Wales.
The Labour Government have delivered for Wales, are working in partnership and do make a difference to people's lives. We have a vision for Wales, which includes local decision making, helping to make the Assembly work and ensuring that the Wales Office fulfils that job in central Government.
We want to create fairness, enterprise, stability and opportunity for all, and to show the importance of the UK being central in Europe. We want to ensure that we have a Wales that is for all, celebrating Labour's history in our 100th year, what we have delivered for the Labour party in Wales and for the people of Wales, and modernising for the future, with the Conservative party remaining where it is now: it has little influence, no power and no support.

It being Seven o'clock, the Motion for the Adjournment lapsed, without Question put.

Mr. Livsey: On a point of order, Mr. Deputy Speaker. Could you use your good influence? We have lost one and a half hours of our Welsh debate today and although 18 right hon. and hon. Members wished to speak, only 12 managed to do so. My hon. Friend the Member for Montgomeryshire (Mr. Öpik) wished to celebrate his birthday by speaking in the debate and was unable to do so.

Mr. Deputy Speaker: The hon. Gentleman knows that from time to time Government statements have to be made on important issues. After that, it was for hon. Members to govern the length of their speeches. Had speeches been shorter, many more hon. Members would have been called and we could even have celebrated the birthday of the hon. Member for Montgomeryshire (Mr. Öpik).

Protected Tenants

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Touhig.]

Ms Karen Buck: I am extremely grateful for the opportunity to highlight the renewed threat facing tens of thousands of protected tenants so soon after it seemed that the Government had at last provided them with some security, following a decade of steep, sometimes stratospheric, rent rises.
Two years ago, I introduced an Adjournment debate drawing attention to the plight of protected tenants. Many of them are elderly or facing retirement; some are vulnerable, the majority are on fixed incomes and almost all of them, by definition, are tenants of long standing. Their secure tenancies predated the deregulation of the private rented sector brought about by the Housing Act 1988. At the time, they were given assurances that their position would not be affected by deregulation, but that proved not to be the case.
Before the 1988 Act, rent assessment committees had to consider factors such as the age, character, location and state of repair of a dwelling. Rent officers and rent assessment committees were also obliged to assume that there was no scarcity of comparable rented accommodation in the locality, as that would have had the effect of sending the price of accommodation up. This provision traditionally meant that fair rents were held below the market price.
The 1988 Act created more tenancies at market rents in the form of assured tenancies and assured shortholds. It also allowed rent assessment committees to take the market into account when setting rents for regulated tenants. The entire framework for the setting of protected tenants' rent was drastically altered. Rent officers and rent assessment committees were increasingly being persuaded that fair rents should be set in line with market rents.
Rent rises started to run well ahead of inflation. By the mid-1990s, rents were often many thousands of pounds a year higher than they had been at the start of the decade.
In my debate in 1998, I urged on a sympathetic Government the need for swift action to prevent people from losing their homes, to redress the fear and anxiety that was shadowing so many lives and to protect the character of our inner-city communities, which is dependent on a stable and mixed residential base, but is in danger of being swept away by the pressures of the international property market.
I was therefore delighted, as were many of my constituents, when, 14 months ago, the Government introduced regulations, based on section 31 of the Landlord and Tenant Act 1987, to impose a rent cap. While still allowing rent rises well in excess of the retail prices index—up to 7.5 per cent. above in the case of initial re-registrations—the cap none the less assured tenants that they did not face a doubling or trebling of their rents over the following years. It allowed them to plan their future—sometimes their last years—with confidence. The rent cap was greeted with relief and gratitude.
In January this year, however, the relief turned to anguish and dismay when the Government's use of section 31 was successfully challenged by the Spath


Holme landlords. Spath Holme argued that the section 31 powers had been introduced as counter-inflationary measures, that this was not the purpose of the order issued in February 1999, and that the Secretary of State had, therefore, acted ultra vires.
The ramifications of the judgment are extremely serious. Many protected tenants who were saved by the order find themselves yet again faced with the risk of losing their homes. Despite the spin that has been placed on the judgment by some landlords, they are not—certainly they are not exclusively—a group of affluent people who have been enjoying an unfair subsidy to shield them from the cold blast of market forces. As the Government's consultation document on the issue made clear, more than 60 per cent of private protected tenants are retired and only 20 per cent. are working, while 70 per cent. of regulated tenants in the private and registered social landlord sector have gross incomes of under £200 a week.

Mr. Michael Portillo: I am very grateful to the hon. Lady for initiating this debate. I should simply like to confirm what she is saying. Even in a constituency such as Kensington and Chelsea, which has its fair share of affluent people, many people are deeply dismayed by the rises that are now in prospect and face the future with great anxiety. The hon. Lady will know that I have taken an interest in the issue, particularly after the Spath Holme judgment. I hope that we can continue to work together on the issue in the spirit of cross-party endeavour. We look forward very much to hearing whether the Minister will be able to give any reassurance today to those who are now in a state of great anxiety.

Ms Buck: I entirely agree with the sentiments expressed by the right hon. Gentleman and endorse his statement that we have been working together, on a cross-party basis, trying to reach a satisfactory conclusion to the matter.
In the few weeks since the Court of Appeal judgment, I—like other hon. Members—have been flooded with letters from desperately worried tenants. I should like to draw attention to some of the sentiments expressed in those letters, to confirm the anxiety and fear felt by many protected tenants. One letter stated:
My landlords did not wait a moment to put in their latest proposed rent increase…another 150 per cent. increase…they are now asking for £21,000 per annum…I greatly fear the prospect of having to go to the Council "cap-in-hand" for benefits which I have never had to ask for before.
A second letter—from a couple in their late 70s who have been at their current address for 28 years—stated:
We were faced immediately with a proposal for a 150 per cent. increase, on top of one of 150 per cent. two years ago.
Another of my constituents has advised me of an application for an 85 per cent. rent increase that has been lodged since the Court of Appeal judgment.
Another letter states:
As a widow of 70, what am Ito do if rents are raised beyond my means?…I have lived in this house for 48 years and, over those years, have spent some £150,000 on the upkeep of the property.

The same theme emerges time and again. A Kensington resident states:
We do not want to leave the flat we have lived in for 45 years…Where would we go, anyway?
A tenant from elsewhere in London wrote of living alone on a small private pension plus a state pension. She now faces a rent increase of more than 100 per cent. With her health suffering from the stress, she asks the Government to help quickly, so that
a lot of suffering, worry and fear might be avoided.
I have initiated this debate to urge the Government to act with due urgency to leave no option unexplored in restoring the rent cap. Tenants who entered into their agreement 20, 30 or 40 years ago, in good faith, do not deserve to be treated as badly as many of them are now being treated. If, in future, market forces are going to wipe out privately rented accommodation in central London for all but the super-rich and for those with company lets, let us at least safeguard the future of current residents.
Some landlords have stated that tenants who find their rent increases unmanageable can apply for housing benefit. Not only do I resent the implication that the public purse should subsidise excessive rent increases, but the washing of hands by landlords is misguided. Housing benefit restrictions are likely to apply to many, if not all, of those properties because of their location, leaving many tenants still in financial hardship.
I am aware, of course, that the Government are petitioning the House of Lords for leave to appeal against the court judgment. Although that is clearly an option that has to be pursued, time is of the essence. Many protected tenants fear that, in the time that that process is likely to take, and without certainty of success, help may come too late for them.
I therefore urge the Minister at least to consider other options, so that action can be taken swiftly. If primary legislation is possible—either freestanding or achieved through the vehicle of a leasehold reform Bill—we might be able to secure the position of protected tenants sooner and more conclusively. I am aware of the difficulties that attend on either of those options, but even in the next two years, while the issue is resolved thousands of tenants will either lose their homes or be in fear of losing them.
I should like to give the last word to a Westminster pensioner, who said:
I really do implore you to speak out on behalf of us tenants who are now fearful that we may lose our homes…I have worked all my life for my country and now I want to live my retirement in peace.

Ms Glenda Jackson: I congratulate my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) not only on obtaining this particular Adjournment debate, but on consistently raising in the House an issue that has a major effect on some of the most vulnerable people in our society. The situation that she is describing is certainly replicated in my own constituency. It is no exaggeration to say that many of my pensioners live in daily fear of losing their homes and such small amounts of money as are left to them.
The Government's action on the Rent Acts (Maximum Fair Rent) Order was welcome, but the recent judgment, to which my hon. Friend and the right hon. Member for


Kensington and Chelsea (Mr. Portillo) referred, has struck fear into the hearts of the most vulnerable people in society, whom it should be one of our first duties to attempt to protect.
I shall not repeat any of the points so tellingly made by my hon. Friend the Member for Regent's Park and Kensington, North. I shall simply touch on some of the experiences of my pensioner constituents. One pensioner couple have lived for 30 years in a property that they are entirely and exclusively responsible for. They have maintained, modernised and repaired it and have seen their rent rise over that period from £500 a year to £12,500. After the Spath Holme judgment, that will rise overnight by an additional £3,000.
Another pensioner couple have been tenants for 36 years. Again, they are responsible for the maintenance and improvement of the property. As their letter says, they have turned
a dirty, vermin-infested flat into the desirable one it is today.
The landlord has done nothing, yet in 1998 they faced rent increases of 68 per cent. After the recent judgment, there will be additional increases of £20 a week.
My final example of the realities of life for some of my most vulnerable constituents is a household in which the head of the household receives incapacity benefit. Their rent has risen from £77 a week in 1999 to £220 a week in 2000. That is clearly unacceptable and untenable.
I take this opportunity to pay tribute to the Camden Federation of Private Tenants, which has been assiduous in trying to help my constituents who are so grievously concerned by the recent judgment. In a letter to the Evening Standard, the chairman of that federation made the point that my hon. Friend has made—that all regulated tenants have suffered massive rises in so-called fair rents in the past 10 years. He gave an example of a two-bedroom flat in my constituency for which the rent went up from £1,000 a year in 1988 to £5,400 in 1998. He agrees that the fair rent order controlled rents, but the lifting of the controls as a result of the new judgment will mean massive increases almost overnight.
Like my hon. Friend, I have concentrated on the experiences of my pensioners, but if we do not tackle the issue of fair rents, London is in grave danger of losing some of its most necessary skills and workers, particularly those who are dedicated to public service, such as nurses, teachers, firemen and policemen. They find it increasingly difficult to pay the rents asked when rises across London are spiralling out of control.
I welcome the Government's appeal to the House of Lords against this decision, but I strongly underline my hon. Friend's wish for the Government to act speedily on the issue. Given the vagaries of the courts, I trust that the Government will examine the possibility of introducing legislation so that some of the most vulnerable people in society can live out their remaining years without fear.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Chris Mullin): I thank my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) for raising this important issue. I also thank my hon. Friend the Member for Hampstead and Highgate (Ms Jackson) and the right hon. Member for Kensington and Chelsea (Mr. Portillo)

for indicating the extent to which it affects many of their constituents. It is good that this is a cross-party issue, because that lends weight to the serious arguments.
I share the concerns expressed about the problems now facing protected tenants, particularly those who are retired and on low incomes, whose plight has been graphically outlined tonight. I am fully aware of the profound anxiety and uncertainty caused by the Court of Appeal's decision.
I start by placing the figures quoted by my hon. Friend in context. We believe that about 56,000 tenants had their rents capped under the order and are immediately affected by the judgment. All 121,000 regulated tenants with registered rents, as well as 241,000 secure housing association tenants, are potentially affected as their rents next come up for review. Regulated tenants are found throughout the country, but the main impact of the judgment falls in London and the north-west—where for historical reasons the gap between existing registered rents and market rents is greatest. For a few tenants—almost all in central London—the difference may be large. Elsewhere, it may be much smaller. Since the introduction of the order, the capped rent has on average been £5.70 per week less than the uncapped rent—though it is obvious from the speeches that that figure is misleading, so I do not seek to make too much of it.
Ultimately, it will be for the courts to determine the effect of the judgment, but I assure the House that we have acted to minimise the inevitable uncertainty. On 4 February, we issued guidance to the Rent Service Agency and rent assessment panels, which states that for new cases registered on or after the date of the judgment, the limit on increases cannot be applied. For cases that had already been capped, the fair rent determined by the rent officer before the cap was applied should be treated as the registered rent, effective from the date of the original registration. The guidance recommended that amended registrations should be issued with a covering letter to all affected tenants and landlords. Those letters are now being sent out.
On 18 February, we issued further guidance on the position on recovery of arrears. It stated our view that if the landlord issues a new notice of increase as required by the Rent Act, tenants will be liable for 28 days' arrears from the date of the notice. Some landlords may decide not to pursue the matter further where the difference is small, but in other cases the difference is big and is likely to be pursued.
The guidance states that it will be open to landlords to seek a county court order amending the original notice of increase, but the courts will have to decide whether the circumstances fall within the relevant provision of the Rent Act. If the court decides to amend the notice, it may apply terms and conditions with respect to arrears of rent as it thinks fit. In any case, recovery of arrears is limited to six months from the date of the county court order. Tenants will not be liable for arrears beyond one month, unless and until an order is made.
On 25 February, we issued guidance on the position of tenants of registered social landlords. We believe that, where the landlord is a housing association, tenants will not be liable to pay any arrears as there is no provision in the Rent Act that would allow a housing association to backdate an increase or to have a notice of increase amended by the courts.
The position of tenants claiming housing benefit is of particular concern. About half of all regulated tenants with registered rents and about two thirds of housing association tenants receive housing benefit. Local authorities have discretion on backdated payments, but claimants on full benefit are likely to have the full additional rent and the full cost of any arrears met by housing benefit. It is likely that tenants who make a new claim for housing benefit because of an increased rent or arrears of rent will also be covered. A circular was issued by the Department of Social Security on 21 February to all local authority housing benefit departments explaining the position.
I appreciate that that explanation may not give my hon. Friends' constituents much immediate comfort, but I assure the House that the Government remain fully committed to protecting tenants from excessive increases in fair rents. We were surprised by the Court of Appeal decision and even more surprised that it refused leave to appeal, but that is not the end of the story. A petition for leave to appeal was submitted to another place on 17 February and we expect to hear the outcome of our application within the next two weeks. If leave is granted, we will vigorously pursue the appeal. We intend also to seek an expedited hearing to resolve the issue as soon as possible.
I am aware that this process is likely to take several months, and that in the meantime some tenants will experience increases in rent and face the possibility of falling into arrears. I also acknowledge that, even for those who are not immediately affected in this way, uncertainty about existing arrears and possible large increases of rent at a future rent review will cause considerable anxiety and worry.

Mr. Portillo: I had a feeling that the Minister was coming to the end of his remarks. I am grateful for all the things that he has said. However, the combination of accumulating arrears and the length of time that the House of Lords judgment is likely to take is not very encouraging to the many people who are affected by great anxiety. Also, the very fact that he was refused leave to appeal from the Court of Appeal does not give the best indicator of the likelihood of success in the House of Lords. Therefore, does he accept that a much more expeditious route would be to initiate new legislation?

Mr. Mullin: I was going to touch on that in my closing remarks. I said as well that we expect to hear the outcome of our application for leave to appeal within the next two weeks, when the position will become much clearer. If there is to be an appeal, we have a period of several months in which to work out how to address it. If there is to be no appeal, we must take action fairly quickly.
I hope that what I have already said about existing arrears will go some way to allaying people's fears. However, in these circumstances, it is entirely understandable that my hon. Friend the Member for Regent's Park and Kensington, North and the right hon. Member for Kensington and Chelsea should raise the possibility of introducing new primary legislation.
As I have said, we share my hon. Friend's concern to provide these tenants, many of them vulnerable, with protection from excessive increases in rent, which we continue to believe is reasonable. I am sure that the House will appreciate that we cannot pre-empt the decision to be made in another place. We must await the result of our petition and if leave is refused, I assure the House that we will consider the position urgently.

Question put and agreed to.

Adjourned accordingly at twenty-two minutes past Seven o'clock.